Standard Chartered is facing further heavy fines and possible criminal prosecutions over alleged breaches of US sanctions against Iran.
The bank is under investigation by the Department of Justice over allegations it violated the terms of a 2012 settlement, the Sunday Times reported.
Three years ago it paid $US667 million ($953m) in penalties to US watchdogs after admitting deliberately disguising transactions that could have broken US sanctions against Iran and other states. Under a deferred prosecution agreement signed at the time, the bank said it had ceased trading with Iranian clients in 2007.
But last year Standard Chartered paid a $US300m fine to a New York financial regulator after its anti-money-laundering systems were found to have been inadequate. In December the DPA was extended for a further three years, and the DoJ is now investigating whether sanctions were broken after 2007.
Last month the bank warned it may be on the hook for new “substantial monetary penalties” from the DoJ investigation, the report added.
The prospect of further heavy fines would further destabilise the London-listed bank, whose market value has tumbled 40 per cent over the past year.
New chief executive Bill Winters is considering tapping investors for billions in fresh capital to strengthen its finances, amid fears of a spike in losses on soured loans. He has vowed to demolish the “legacy” of his predecessor, Peter Sands, which he claimed favoured “growth over risk discipline”.
The bank’s office in Dubai was a key part of its expansion plans after the 2008 financial meltdown. The DoJ is probing allegations it employed a team of fluent Farsi speakers in the emirate between 2009 and 2011.
The bankers were allegedly tasked with drumming up business with Iranian clients. This would have been lucrative work because of the US embargo on the country.
An unnamed British lender was last year cited in legal filings related to a record $US9 billion fine for the French bank BNP Paribas over sanctions violations. The British bank had acted with BNP to conduct foreign exchange deals for an Iranian company until December 2011, when the British lender put a stop to the trades, according to the filings. Standard Chartered said it was “co-operating fully with US authorities”. “The group has taken a number of steps to comply with the requirements of the original agreements,” it said.
These include implementing “more rigorous US sanctions policies”, improving staff training and beefing up its legal and financial crime compliance teams.
It said it would “make additional substantial improvements to its US sanctions program to reach the standard required by the DPAs”.
By Press TV