StanChart faces uncertainty over US sanctions inquiry

StanChart faces uncertainty over US sanctions inquiry

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Normal Chartered has agreed a five-month extension to an settlement with US authorities that spared it from prosecution for breaching sanction guidelines in 2012, prolonging uncertainty over whether or not the financial institution might face harder penalties.

StanChart stated in its announcement late on Friday that its efforts to boost its sanctions compliance programs had not but glad the US authorities six years after it was fined $667m over breaches of sanctions towards Iran and different international locations.

It added that US authorities have been nonetheless trying into whether or not the financial institution had continued to breach sanctions by processing US greenback transactions for Iran-controlled entities even after it signed a deferred prosecution settlement (DPA) in 2012 to keep away from prison expenses.

If StanChart have been discovered to have breached the DPA, it might result in additional fines and doubtlessly a prison prosecution.

The financial institution’s DPA has already been prolonged twice, as soon as in 2014 when it was fined an extra $300m after an impartial monitor discovered the financial institution’s system for detecting suspicious transactions was insufficient, and once more late final yr. The financial institution stated on Friday that the time period of the monitor had additionally been prolonged till the top of the yr.

Friday’s announcement got here just a few months after StanChart was fined S$5.2m by Singapore authorities for breaching anti-money laundering guidelines and it was accused by a British politician of serving to the Gupta household to maneuver cash illicitly out of South Africa.

It additionally contrasts with the expertise of its rival HSBC, which firstly of the yr celebrated the expiry of its personal five-year DPA with the US justice division for sanction breaches and money-laundering offences.

StanChart stated: “The settlement acknowledges that the group has taken quite a few steps and made important progress towards compliance with the necessities of the DPA and enhancing its sanctions compliance programme, however that the programme has not but reached the usual required by the DPA.”

It added that the financial institution “continues to co-operate with an ongoing US sanctions-related investigation, however that extra time is required to finish the investigation” and that it’s dedicated to “a complete programme of enhancements to its monetary crime controls”.

Earlier this yr, Peter Hain, a former Labour cupboard minister and present member of the Home of Lords, stated he had written to the federal government requesting an investigation into whether or not StanChart and its rival HSBC dealt with illicit funds linked to the Gupta household by way of Dubai and Hong Kong. In response, StanChart stated that “after an inside investigation accounts have been closed by us by early 2014”.

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