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From Banking and Finance Law Daily, April 9, 2019

Standard Chartered Bank to pay $1.1 billion to settle alleged U.S. economic sanctions violations

By Lauren Bikoff, MLS

To settle alleged U.S. sanctions violations, Standard Chartered Bank has agreed to pay a combined $1.1 billion to federal, state, local, and United Kingdom government partners.

Standard Chartered Bank (SCB) has agreed to a combined $1.1 billion settlement with federal, state, local, and United Kingdom government partners to resolve its potential civil liability for apparent violations of U.S. economic sanctions. The settlement includes $639 million to the Treasury Department’s Office of Foreign Assets Control (OFAC) and $164 million to the Federal Reserve Board.

OFAC. The $639 million settlement resolves OFAC’s investigation into apparent violations of a number of U.S sanctions programs by SCB, including those relating to Burma, Cuba, Iran, Sudan, and Syria, according to a release from the agency. OFAC alleges that from June 2009 until May 2014, SCB processed 9,335 transactions to or through the United States totaling $437,553,380. All of these transactions involved persons or countries subject to comprehensive sanctions programs administered by OFAC (including Burma, Cuba, Iran, Sudan, and Syria).

OFAC is also settling a separate case involving apparent violations of sanctions by SCB related to Zimbabwe. Separately, between May 2009 and July 2013, SCB Zimbabwe processed transactions to or through the United States involving Zimbabwe-related Specially Designated Nationals (SDNs) or entities owned 50 percent or more, individually or in the aggregate, by one or more Zimbabwe-related SDNs. SCB will pay $18 million to OFAC to settle civil liability relating to these violations.

Under the settlement agreement, SCB will sustain its commitment to implementing robust compliance procedures by ensuring that it has a management team in place that: (1) is committed to a culture of compliance; (2) conducts regular risk assessments; (3) ensures that its internal controls appropriately mitigate the entity’s sanctions-related risks; (4) conducts regularized audits; and (5) provides ongoing sanctions compliance training throughout SCB.

Federal Reserve. SCB will pay $164 million to the Federal Reserve to settle allegations of unsafe and unsound practices related to inadequate sanctions controls and for the failure to disclose these sanctions risks to the Fed, according to a release from the Board.

Under the terms of the agreement, SCB is required to improve its U.S. law compliance program and has 60 days to submit a revised U.S. Law Compliance Program to the Fed. Additionally, the firm is required to strengthen management oversight and perform annual risk-management assessments for high-risk operations. Finally, SCB is restricted from re-employing any individuals involved in the violations.

Companies: Standard Chartered Bank

MainStory: TopStory CrimesOffenses EnforcementActions FederalReserveSystem UDAAP

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