New York has banned Standard Chartered Bank from accepting new dollar clearing accounts without the state’s approval after the London-based firm failed to improve money laundering controls.
Standard Chartered’s Hong Kong subsidiary has also been suspended from high-risk retail dollar clearing, and will be forced to end high-risk client relationships at its United Arab Emirates branches.
The bank has also agreed to pay a $US300 million penalty.
“If a bank fails to live up to its commitments, there should be consequences,” Department of Financial Services Superintendent Ben Lawsky said in a statement. “That is particularly true in an area as serious as anti-money-laundering compliance, which is vital to helping prevent terrorism and vile human rights abuses.”
The penalties relate to Standard Chartered’s 2012 settlement with the state for $US340 million for lying about Iranian money laundering. As part of that agreement, Standard Chartered allowed the state to set up an independent oversight authority. That authority subsequently found that the bank “failed to detect a large number of potentially high-risk transactions for further review.”
Here’s the new order:
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