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StanChart to pay $300m penalty for AML deficiencies

Dubai, August 20, 2014

Standard Chartered has reached a $300 million civil monetory penalty settlement with the New York State Department of Financial Services (DFS) regarding deficiencies in the anti-money laundering trisection system at its New York branch.

The system, which is separate from the sanctions screening process, is one part of the bank’s overall financial crime controls and is designed to alert the New York branch to unusual transaction patterns that require further investigation on a post-transaction basis.

The settlement also includes enhancements to the transaction surveillance system at the New York branch, a two-year extension of the term of the DFS-appointed independent compliance monitor and a set of temporary remediation measures.

The New York branch will not, without prior approval of the DFS in consultation with the monitor, open a dollar demand deposit account for any client that does not already have such an account with the bank’s New York branch, under the settlement.

Within 30 days, requirements for inclusion of identifying information for originators and beneficiaries of some affiliate and third-party payment messages cleared through the New York branch, it said.

After 45 days, a restriction on dollar clearing services for certain Hong Kong retail business clients, it included.

The bank is also required to do enhanced monitoring of certain small and medium sized enterprise clients in the UAE.

In any event, the bank is seeking to exit this business as part of its broader efforts to sharpen its strategic focus, withdrawing from or re-aligning non-strategic businesses, including those where increased regulatory costs and risks undermine their economic viability, said a statement.

It is making efforts to complete the exit within the timelines set out in the order. If the exit is not achieved within this period, further restrictions will be required, unless an extension is granted by the DFS

These remediation measures will remain in place until the transaction surveillance system’s detection scenarios are operating to a standard approved by the monitor, it said.

The UAE remains one of Standard Chartered’s leading franchises globally and the move does not reflect a decreased focus on the country. It will, however, allow the bank to reposition itself for further growth by focusing its efforts on corporate and institutional, commercial, private banking, retail and Islamic banking.

The consent order represents a full and final settlement between the Group and the DFS of the conduct at issue. - TradeArabia News Service




Tags: penalty | standard | AML | Chartered |

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