Treasury Settlement Part of Combined $327 Million
Settlement for Bank’s
Apparent Violations of Sanctions
WASHINGTON – As part of a combined $327
million settlement with federal and local government partners, the U.S.
Department of the Treasury’s Office of Foreign Assets Control (OFAC) today
announced a $132 million agreement with Standard Chartered Bank (SCB) to settle
its potential liability for apparent violations of U.S. sanctions. Today’s
settlement resolves the OFAC’s investigation into apparent violations by the
London and Dubai offices of SCB of a number of U.S sanctions programs, including
those relating to Iran, Burma, Libya and Sudan. Matters were also settled
relating to a case involving transactions related to the Foreign Narcotics
Kingpin Sanctions Regulations.
“Today’s settlement is the result of an exhaustive
interagency investigation into Standard Chartered Bank’s attempts to violate
U.S. sanctions programs through the ‘stripping’ from payment messages of
critical information,” said OFAC Director Adam J. Szubin. “We remain committed
to working with our partners in the regulatory and law enforcement community to
ensure that the U.S. financial system is protected from the risks associated
with this type of illicit financial behavior.”
2001 to 2007, SCB’s London head office and its Dubai branch engaged in payment
practices that interfered with the implementation of U.S. economic sanctions by
financial institutions in the United States, including SCB’s New York branch. In
London, those practices included omitting or removing material references to
U.S.-sanctioned locations or entities from payment messages sent to U.S.
financial institutions. SCB accomplished this by replacing the names of ordering
customers on payment messages with special characters, effectively obscuring the
true originator and sanctioned party in the transaction; and forwarding payment
messages to U.S. financial institutions that falsely referenced SCB as the
ordering institution. In Dubai, the practices included sending payment messages
to or through the United States without references to locations or entities
implicating U.S. sanctions. As a result, millions of dollars of payments were
routed through U.S. banks for or on behalf of sanctioned parties in apparent
violation of U.S. sanctions.
actions were apparent violations of the Iranian Transactions Regulations (ITR),
31 C.F.R. part 560; the Burmese Sanctions Regulations (BSR), 31 C.F.R. part 537;
the Sudanese Sanctions Regulations (SSR), 31 C.F.R. part 538; and the
now-repealed version of the Libyan Sanctions Regulations (LSR), 31 C.F.R. part
550, which was in effect until 2004. Eight apparent violations of the Foreign
Narcotics Kingpin Sanctions Regulations (FNKSR) by SCB’s New York branch, which
occurred later and apart from the above conduct, were also settled.
the settlement agreement, SCB is required to put in place and maintain policies
and procedures to minimize the risk of the recurrence of such conduct in the
future. SCB is also required to provide OFAC with copies of submissions to the
Board of Governors of the Federal Reserve System (Board of Governors) relating
to the OFAC compliance review that it will be conducting as part of its
settlement with the Board of Governors.
standard practice, OFAC worked closely and collaboratively with its counterparts
at other government agencies in the investigation of this matter. Today’s OFAC
settlement is simultaneous with the bank’s settlements with the U.S. Attorney's
Office for the District of Columbia, the Department of Justice's National
Security Division, the Department of Justice's Asset Forfeiture and Money
Laundering Section and the New York County District Attorney’s Office; as well
as orders involving the Board of Governors with the cooperation of the UK’s
Financial Services Authority.
$132 million settlement with OFAC will be deemed satisfied by the bank’s payment
of a forfeiture to the Department of Justice for the same pattern of