Monitoring Period Extended Over Standard Chartered Bank Case

Standard Chartered Bank Case
Standard Chartered Bank Case

An arrangement that New York state regulators first made in 2012 with the Standard Chartered Bank to have an independent monitor check the British bank’s compliance with money-laundering statutes has been extended through 2018.

The state Department of Financial Services (DFS) announced that under a supplement consent order it entered into with the London-based Standard Chartered on April 21, the bank will continue to maintain an independent monitor to track its adherence to the Bank Secrecy Act and Anti-Money Laundering rules.

The bank and DFS initially entered into the special monitoring agreement under a 2012 consent order signed at the same time the bank agreed to pay a $340 million civil penalty to the department.

The financial services department said in that first agreement that as much as $250 billion may have been allowed to pass through Standard Chartered Bank (SCB) accounts in its New York branch from 2001-07 in violation of U.S. sanctions against the Iranian government for sponsoring international terrorism and attempting to build nuclear weapons (The American Lawyer, Aug. 7, 2012).

The monitor was maintained for at least two more years under another consent order between the financial services department and Standard Chartered in 2014. That agreement resulted in that state receiving payment of another $300 million in civil penalties (The American Lawyer, Aug. 20, 2014).

The latest consent order acknowledged that since 2014, the bank has made “substantial progress” toward complying with state regulators’ money-laundering concerns, but said there were aspects of both the 2012 and the 2014 orders with which there had not been full compliance.

It also said the bank was still in the process of upgrading its electronic systems to better monitor transactions, as Standard Chartered agreed to do in 2014.

Richard Loconte, a DFS spokesman, said he was prohibited by the consent orders from saying more about the latest order, such as discussing what areas the department believes require the monitor’s continuing attention.

Standard Chartered did not respond to requests for comment Wednesday.

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