Standard Chartered Fined $300m For Lax Controls
UK-based Standard Chartered bank is to pay $300m (£180m) to US regulators over its failure to improve anti-money laundering provisions and stop financial crime.
The agreement with New York's Department of Financial Services (DFS) follows the bank's agreement two years ago to improve compliance.
As a result, Standard Chartered will suspend dollar exchanges through its New York branch for high-risk retail business clients at its SCB Hong Kong subsidiary.
"If a bank fails to live up to its commitments, there should be consequences," DFS superintendent Benjamin Lawsky said.
Although based in London, the bank's primary areas of operation are in emerging markets in Asia, the Middle East and Africa.
After the announcement the bank released a statement about the settlement.
"The group accepts responsibility for and regrets the deficiencies in the anti-money laundering transaction surveillance system at its New York branch," it said.
"The group has already begun extensive remediation efforts and is committed to completing these with utmost urgency.
"More broadly, the group is committed to enhancing its effectiveness in the fight against financial crime, and in this context, has committed substantial resources to a multi-year financial crime risk mitigation programme."
Officials said the independent surveillance system established in 2012 at its New York branch failed to detect many potentially high-risk transactions for closer analysis.
They said a significant number originated from branches in the United Arab Emirates (UAE), which includes the commercial hub of Dubai.
In 2012 the bank was fined $667m (£400m) by US regulators for breaking sanctions on Iran by hiding transactions worth up to $250bn (£150bn).
It will now terminate client accounts with a number of small and medium-sized businesses in the UAE.
The bank said it was continuing to fix its compliance systems and would work with the small proportion of clients affected in Hong Kong and the UAE to minimise disruption.
It has agreed to extend surveillance of its New York branch and allow independent monitoring for another two years.
Just weeks ago the bank warned it was at risk of another US penalty, as it saw a profit drop of a fifth in its half-year profit.