Standard Chartered rejects Iran trade claims

Standard Chartered Bank on Tuesday rejected allegations from US regulators that it hid $250 billion in transactions with Iranian banks for almost a decade in violation of US sanctions.

In the latest US move against foreign banks dealing with Iran, New York state regulators branded the lender a "rogue bank" and threatened it with fines and the suspension of its licence.

The Department of Financial Services (DFS) said the London-based giant systematically disguised foreign exchange deals with Iran that potentially opened the US banking system to terrorists and criminals.

But Standard Chartered said it "strongly rejects ... the portrayal of facts as set out" by the DFS.

"The group does not believe the order issued by the DFS presents a full and accurate picture of the facts," group secretary Annemarie Durbin said in a statement to the Hong Kong stock exchange.

Standard Chartered was ordered to appear on August 15 to explain the "apparent violations of law" and demonstrate why its licence to operate in New York should not be revoked.

"For almost 10 years, SCB schemed with the government of Iran and hid from regulators roughly 60,000 secret transactions, involving at least $250 billion," the regulator said.

Standard Chartered falsified transaction reports and obstructed oversight "in its evident zeal to make hundreds of millions of dollars at almost any cost", it added.

The transactions mainly involved US dollar transfers for state-owned Iranian banks, including the central bank, that fell under US controls aimed at undermining Tehran's alleged nuclear weapons programme.

The activity "left the US financial system vulnerable to terrorists, weapons dealers, drug kingpins and corrupt regimes", it said.

There was also evidence of possible illegal transactions with Libya, Myanmar and Sudan while they were under US sanctions.

The bank, which focuses on Asia, the Middle East and Africa, said it was surprised at the claims as it had informed US agencies in 2010 that it had voluntarily launched an internal compliance review.

It said the review "did not identify a single payment on behalf of any party that was designated at the time by the US government as a terrorist entity or organisation".

The bank also said it had stopped all new business with Iranian customers more than five years ago.

"The group takes its responsibilities very seriously, and seeks to comply at all times with the relevant laws and regulations," Durbin said. "We intend to discuss these matters with the DFS and to contest their position."

The bank could face steep fines if found guilty.

Standard Chartered shares plunged 7.4 percent to HK$174.20 by the break Tuesday in Hong Kong, as the broader index rose 0.29 percent. In after-hours trade in London it tumbled 6.19 percent to 14.70 pounds.

Justin Harper, market strategist for IG Markets in Singapore, said being tagged a "rogue bank" by a US regulator was a severe blow.

"They have got a good reputation in the industry which will be tarnished by these accusations, whether they prove accurate or not," he told AFP.

In July, a US Senate report accused London-based HSBC of concealing more than $16 billion in sensitive transactions with Iran and Mexican drug lords over 2001-2007.

And in June ING Bank was fined $619 million for its role in processing $1.6 billion through the US financial system for Cuba, Iran, Myanmar, Sudan and Libya.

The New York regulator said Standard Chartered's illicit Iran business involved thousands of U-turn transactions, in which dollar-denominated payments and transfers are routed into and then out of the United States by non-US entities.

Such deals involving Iranian institutions were strictly limited, and more recently completely banned, under US sanctions against Tehran.

But the regulator, citing internal Standard Chartered documents, said the bank's London office routinely stripped the transactions of any signs that Iranian banks were involved.

"Senior SCB management knowingly embraced the bank's fraudulent U-turn procedures," the department said.

The bank's attitude was captured in a comment from a group executive director, as related to the New York regulator by an officer of Standard Chartered's New York branch.

Using vulgar language, he purportedly asked: "Who are you to tell us, the rest of the world, that we're not going to deal with Iranians?"

In a statement accompanying an interim profit result last week, chief executive Peter Sands lauded the bank's "culture and values".

"We are selective and turn things down that we don't understand, or don't like the look of," he said.

Loading...

Editor’s note:Yahoo Philippines encourages responsible comments that add dimension to the discussion. No bashing or hate speech, please. You can express your opinion without slamming others or making derogatory remarks.

  • Billionaire finds wreck of WWII ship in Phl
    Billionaire finds wreck of WWII ship in Phl

    Microsoft co-founder Paul Allen says he has found the Japanese Navy’s biggest warship at the bottom of the sea in the Philippines, 70 years after US forces sank it. Allen posted a photo on Twitter on Tuesday of the World War II battleship Musashi’s rusty bow, which bore the Japanese empire’s Chrysanthemum seal. The American billionaire, who has also pursued space exploration, said his luxury yacht and exploration ship, the M/Y Octopus, found the Musashi one kilometer (1.6 miles) deep on the …

  • Miriam bucks house arrest for Enrile
    Miriam bucks house arrest for Enrile

    Sen. Miriam Defensor-Santiago believes granting Senate Minority Leader Juan Ponce Enrile house arrest, while former President Gloria Macapagal-Arroyo remains under hospital detention, will violate the equal protection clause of the Constitution. “That’s already a violation of the equal protection of the law,” she said. …

  • 8 of 10 cities most at risk from natural disasters located in Phl – study
    8 of 10 cities most at risk from natural disasters located in Phl – study

    Eight of 10 world cities most exposed to natural hazards are in the Philippines and more than half of the 100 cities most exposed to earthquakes, storms and other disasters are in four Asian nations, according to a research. The study, published on Wednesday by risk analysis firm Verisk Maplecroft, analyzed the threat posed by storms, floods, earthquakes, tsunamis, fires, volcanoes and landslides in more than 1,300 cities. The study found that the 10 cities most at risk are Port Vila in …

  • US ambassador recovers from knife attack praised by N. Korea
    US ambassador recovers from knife attack praised by N. Korea

    The US ambassador to South Korea, Mark Lippert, was recovering from surgery Thursday after having his face and arm slashed by a knife-wielding activist in an attack applauded by North Korean state media. The United States condemned the "act of violence" which saw the ambassador rushed to hospital where his condition was described as stable after two-and-a-half hours of surgery that included 80 stitches to a deep gash on his right cheek. During the assault, Kim screamed a slogan in favour of …

  • World's oldest person wonders about secret to longevity too
    World's oldest person wonders about secret to longevity too

    TOKYO (AP) — The world's oldest person says 117 years doesn't seem like such a long time. …

  • New Moro rebel group emerges
    New Moro rebel group emerges

    A radical Muslim cleric trained in the Middle East and considered one of the leaders of the Bangsamoro Islamic Freedom Fighters (BIFF) has broken away from the terror group to form his own band of jihadists who are now reportedly providing sanctuary to bomb expert Basit Usman and at least five foreign militants, the military said yesterday. Armed Forces of the Philippines (AFP) spokesman Col. Restituto Padilla, citing reports from the field, said the Justice for Islamic Movement (JIM) was …

  • Ohio mom, boyfriend guilty; child emailed teacher for help

    PORTSMOUTH, Ohio (AP) — A woman and her boyfriend pleaded guilty to raping her young children and were sentenced to prison on Wednesday, a year after one of her daughters emailed a teacher for help and said she and her siblings were being chained to their beds, deprived of food and sexually assaulted. …

  • UNA hits PNP selection process
    UNA hits PNP selection process

    The United Nationalist Alliance (UNA) hit yesterday the apparent machinations in the selection of the new Philippine National Police (PNP) chief. Navotas Rep. Toby Tiangco, UNA interim president, said the administration and the ruling Liberal Party (LP) are perpetuating the bata-bata or patronage system in the selection process of the police chief. “They will start this by maneuvering the appointment of Gen. Garbo as PNP chief,” said Tiangco, referring to one of the top contenders for PNP …

POLL

Should Aquino be held accountable over the Mamasapano operations?

Loading...
Poll Choice Options