The Business Times

US extends scrutiny of Standard Chartered on sanctions compliance

Published Tue, Dec 9, 2014 · 11:45 PM
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[NEW YORK] Standard Chartered will face another three years of scrutiny by US prosecutors for compliance with government sanctions against certain countries, according to documents filed on Tuesday that also noted another probe of the bank is underway.

The original deferred prosecution agreements, struck with the US Justice Department and the Manhattan district attorney over the bank's violations related to US sanctions on Iran and other countries, was due to expire on Wednesday.

The agreement to extend the deals means that the bank will face enhanced oversight for a longer period of time and could be hit with harsher penalties.

The deferred prosecutions could be pulled back in the next three years and criminal charges against the bank could be filed, said Joan Vollero, a spokeswoman for the Manhattan district attorney.

In a statement, the bank said it agreed to the extension and would work with authorities to reach the standard required.

The US amendment said the bank had taken steps to improve its compliance program and had hired new leadership and staff in its legal and financial crime compliance offices.

The Justice Department said it sought the extension in part because it had obtained information about "possible historical violations" of US sanctions laws that took place after 2007.

It said it needed more time to investigate whether the violations occurred and whether they were willful.

Reuters reported in October that authorities were investigating potential violations connected to Standard Chartered's banking for Iran-controlled entities in Dubai.

According to the amendments, the bank also agreed to retain an independent compliance monitor overseen by the prosecutors.

The bank said it is cooperating with the latest investigation.

Standard Chartered paid US authorities US$667 million (S$877.7 million) in 2012 over the violations, including to New York state's banking regulator. In August of this year, the regulator fined Standard Chartered another US$300 million after a monitor it appointed uncovered shortcomings in the bank's computers that caused potentially high-risk transactions to go undetected.

Standard Chartered has faced a series of problems since the original fine on the bank in 2012 for breaching US sanctions, heaping pressure on its chief executive, Peter Sands.

Its shares have fallen 30 per cent this year after it said profits would fall for a second successive year in 2014 after losses in Korea and a rise in losses from bad debts.


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