Standard Chartered has agreed to pay over $1bn for illegally processing transactions in violation of Iranian sanctions, the US Department of Justice has announced.
The bank has agreed to a forfeiture of $240m, a fine of $480m, and an amendment and extension of its deferred prosecution agreement with the Justice Department for another two years for violating the International Emergency Economic Powers Act (IEEPA). This conspiracy lasted from 2007 through 2011 and is believed to have resulted in the processing of 9,500 financial transactions, worth around $240m, through US financial institutions to benefit Iranian entities.
In addition to this, Standard Chartered will extend its deferred prosecution agreement (DPA) with New York County District Attorney’s Office (DANY) for another two years and pay a $292m penalty. This DPA states Standard Chartered has admitted it violated New York State law by falsifying records of New York financial institution, among other things.
Standard Chartered has also entered separate settlement agreements with the U.S. Department of the Treasury’s Office of Foreign Assets Control (OFAC), the Board of Governors of the Federal Reserve System (the Federal Reserve), the New York State Department of Financial Services (DFS), and the UK’s Financial Conduct Authority (FCA). Combined, these all amount to an additional $477m in penalties.
The Justice Department has decided to credit a portion of these related payments and will collect $52m of the fine, in addition to the $240 million forfeiture, it said.
Assistant Attorney General Benczkowski said, “Today’s resolution sends a clear message to financial institutions and their employees: if you circumvent U.S. sanctions against rogue states like Iran—or assist those who do—you will pay a steep price.
“When a global bank processes transactions through the U.S. financial system, its compliance program must be up to the task of detecting and preventing sanctions violations—and when it is not, banks have an obligation to identify, report, and remediate any shortcomings. The Justice Department is committed to protecting our U.S. financial system and will continue to hold financial institutions and individuals to account when they violate U.S. sanctions laws.”
FBI Assistant Director in Charge William Sweeney said, “U.S. sanctions laws exist to protect our national security and the integrity of our financial systems. Global banks that facilitate transactions through our financial institutions have to play by these rules, plain and simple. Allowing hostile nations access to our economy is dangerous business.
“The deferred prosecution agreement and charges announced today make it abundantly clear that any alleged violation of IEEPA, whether on behalf of an individual or entity, will not be taken lightly.”
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