30 Aug 2018
Standard Chartered Bank expects it could pay a hefty fine to the UK’s Financial Conduct Authority (FCA) for violating financial crime rules outlined in an ongoing investigation, its interim report shows.
The bank explained that it is engaging with the FCA to resolve an investigation into the effectiveness and governance of its financial crime controls between 2009 and 2014.
The FCA probe is focused “within the correspondent banking business carried out by Standard Chartered Bank’s London branch, particularly in relation to the business carried on with respondent banks from outside the European Economic Area,” the bank said.
The investigation looks at the effectiveness and governance of those controls in one of Standard Chartered Bank’s overseas branches and the oversight exercised at Group level over those controls.
The lender added that it has accepted that there were weaknesses in certain aspects of its financial crime controls during the relevant period of the investigation and it is engaging with the FCA on terms of the resolution of the probe.
“Resolution of the investigation could involve a substantial monetary penalty and other civil measures available to the FCA,” it said, but did not specify more details.
A spokesman for Standard Chartered declined to comment beyond what was disclosed in the report.
The FCA also declined to comment.
The bank did not say how much exactly it has set aside to pay for the expected penalty.
In 2014, the FCA fined it £7.6 million for failings relating to its anti-money laundering (AML) policies and procedures over customers linked to PEPs (politically exposed persons).
It has also landed in trouble with US authorities, who fined it $227 million in 2012 for facilitating transactions to sanctioned Iranian, Sudanese and Libyan entities.
Last year, Lord Peter Hain urged the FCA to investigate it as well as HSBC over allegations of facilitating money laundering for the Gupta family, who are friends of former South African president Jacob Zuma.
The Gupta’s have denied wrong doing.
This year Standard Chartered announced it would be extending its deferred prosecution agreements.
Separately, Bloomberg reported on Wednesday that Standard Chartered may face another US fine for Iran sanction breaches.
– Irene Madongo
Photo: Standard Chartered Bank
You can claim CPD minutes for this content, by signing up to our CPD WalletFREE CPD Wallet