New York’s Department of Financial Services slapped a $300 million fine on U.K.-based emerging markets bank Standard Chartered Plc, and put wide-ranging limits on its business in the U.S. after a second violation of anti-money laundering regulations within two years.
The DFS said Standard Chartered would be banned from clearing dollar payments for high-risk clients at its Hong Kong subsidiary and would have to stop processing payments for high-risk small and medium business clients at its business in the United Arab Emirates within 90 days. It also banned Standard Chartered from opening any dollar accounts for new customers in New York without its permission.
“If a bank fails to live up to its commitments, there should be consequences,” DFS head Benjamin 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.”
However, as with French bank BNP Paribas (BNPQY), which was fined $8.9 billion for violating anti-money laundering rules over the best part of a decade, Standard Chartered was allowed to keep its banking license.
As part of the settlement, the DFS-appointed monitor that has been at Standard Chartered for the last two years (since it was first found to have violated anti-money laundering regulations) will stay for another two years.
The bank said in a statement that it “accepts responsibility for and regrets the deficiencies in the anti-money laundering transaction surveillance system at its New York branch.”
It said it had already begun “extensive remediation efforts” and would complete them “with utmost urgency.”
It noted that it is trying to exit the UAE business as part of a strategic refocusing.
