Standard Chartered (StanChart) has agreed to pay as much as US$300 million to New York’s banking regulator to settle allegations that it failed to properly check possible money laundering.
The New York Department of Financial Services (DFS) said the British bank’s internal compliance systems had failed to detect or act on a number of "potentially high-risk transactions" originating from Hong Kong and the United Arab Emirates.
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Benjamin Lawsky, superintendent of financial services at DFS, said: "If a bank fails to live up to its commitments, there should be consequences. That is particularly true in an area as serious as anti-money-laundering compliance, which is vital to helping prevent terrorism and vile human rights abuses."
As part of the agreement with DFS, StanChart will suspend clearing activity for high-risk Hong Kong business clients and exit certain client relationships at its branches in the UAE.
The British bank will also not be allowed to accept new customers for dollar-clearing without prior approval by the DFS.
The penalty is the second the British bank has paid to the New York DFS in two years. In August 2012, the bank agreed to a US$340 million settlement over allegations that it stripped identifying information from transactions linked to Iran, making it impossible for US banks to detect them.
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By GlobalData
