Standard Chartered agrees $340m fine for Iran scandal

15 August 2012

Standard Chartered has reached an agreement with US regulators to pay a $340m fine regarding its money laundering links with Iran.

The major British-based bank revealed last night that a hearing due to be held by the New York State Department of Financial Services (DFS) today has been adjourned after it agreed to pay the $340 million for its wrongdoing, which contravened the sanctions regime in place against Iran.

"A formal agreement containing the detailed terms of the settlement is expected to be concluded shortly," the banks said in a prepared statement.

In addition, Standard Chartered stated that it is continuing to "engage constructively" with other relevant US authorities.

Meanwhile, Benjamin Lawsky, superintendent of the DFS in New York and one of the key players in this saga, revealed that both the DFS and Standard Chartered have found consensus on the fact that the misconduct with Iran involved transactions worth at least $250 billion. The bank had been facing the possible loss of its valuable banking license to operate in New York if it hadn’t agreed to the fine, having initially vehemently denied the allegations of facilitating sanctions busting payments. The bank had originally been discussing a much much lower fine of $5m.

On top of the $340 million penalty imposed, Standard Chartered is also required to install a monitor who will report to the DFS for at least the next two years on its activities, effectively approving all US dollar transactions that flow through the bank’s US office. The agreement has been reached, avoiding the bad publicity that no doubt would have flowed from today’s planned hearing, following the intervention of Standard Chartered’s chief executive Peter Sands, who flew to New York this week to resolve the matter.

By Asim Shah and Neil Ainger

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