STANDARD CHARTERED HAS agreed to settle US allegations that it helped Iranian clients dodge sanctions, accepting a fine of $340 million from New York’s banking watchdog.
The bank had denied accusations that it systematically hid $250 billion worth of Iranian client transactions that were carried out over 10 years.
Under the terms of the deal, Standard Chartered agreed to its transactions being monitored for two years and to appoint auditors to investigate compliance with US sanctions.
The deal does not cover separate probes by federal US regulators, including the Treasury Department.
Although the cash settlement may appear to be a steep, it is far from the worst-case scenario for the bank.
Banking licence
New York state’s Department of Financial Services had questioned whether Standard Chartered should be allowed to keep its banking license, raising the spectre of being cut out of a major market.
And the bank should have deep enough pockets to cover the fine, without operations being dented. In the first half of this year Standard Chartered reported profits of $3.95 billion.
The greater price may be reputational damage. The London-headquartered bank is a household name in many emerging markets, particularly in Asia.
Since the allegations became public just over a week ago the firm’s shares have lost around 15 per cent of their value.
The allegations thrust Standard Chartered to the center of a major geopolitical dispute.
In the last decade the United States and allies have ramped up sanctions against Iranian banks, institutions and individuals, accusing them of helping the government seek a nuclear weapon, repress rights and fund terrorism.
US authorities accused Standard Chartered of throwing the doors of the financial system wide open to “terrorists, weapons dealers, drug kingpins and corrupt regimes.”
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