On April 9, 2019, the U.S. Department of the Treasury’s Office of Foreign Assets Control (OFAC) announced a $639,023,750 settlement with Standard Chartered Bank (SCB), a UK-based financial institution, over potential civil liability related to alleged violations of the now-repealed U.S. economic sanctions on Burma and Sudan and the continuing sanctions on Cuba, Iran and Syria. Separately, SCB agreed to pay $18,016,283 to settle potential liability for alleged sanctions violations involving Zimbabwe. This agreement is part of a $1.1 billion global settlement among SCB, OFAC, the Board of Governors of the Federal Reserve System, the Federal Reserve Bank of New York, the U.S. Department of Justice, the U.S. Attorney’s Office for the District of Columbia, the New York County District Attorney’s Office, the New York State Department of Financial Services and the UK’s Financial Conduct Authority.
The alleged violations consisted of a total of 9,335 transactions, worth $437,553,380, processed by SCB to or through the U.S. financial system from June 2009 and June 2014 involving persons from or in the sanctioned countries. A majority of the transactions involved Iran-related accounts maintained by SCB Dubai and processed to or through SCB’s branch in New York or other U.S. financial institutions. SCB also settled alleged violations that the transactions involved persons or entities included on the Specially Designated Nationals (SDN) List.
In addition to several compliance measures taken since 2012, SCB agreed to implement further procedures to guarantee that (1) its management team is committed to a culture of compliance and (2) SCB (a) conducts regular risk assessments, (b) continues to implement internal policies and procedures (internal controls) outlining its sanctions compliance program, (c) conducts regularized testing and audits, (d) provides frequent and adequate OFAC-related training and (e) submits an annual certification confirming the implementation of such measures for a period of five years. For further information see the Settlement Agreement.
SCB issued a press release accepting full responsibility for the violations, which involved “two former junior employees” who conspired with two customers’ Iranian connections to break the law. The statement notes that SCB has undergone a comprehensive and positive transformation since the conduct occurred and cooperated fully with all relevant authorities.