Standard Chartered NY forced to suspend clearing following AML concerns
Standard Chartered Bank’s New York business has been fined $300 million and ordered to suspend US dollar clearing services to retail clients of the bank in Hong Kong, following an investigation by the New York State Department which determined its transaction monitoring system does not meet anti-money laundering requirements agreed in 2012.
In 2012, Standard Chartered was accused of breaching US sanctions against Iran by processing transactions to the country. Although a settlement resolved these issues at the time, Standard Chartered is now being accused of breaching that settlement, which required the bank to improve its AML processes.
In Hong Kong, the Hong Kong Monetary Authority has recognised the NYSD order and issued a statement saying that when a bank conducts cross border business transactions involving a foreign jurisdiction, the bank and the relevant authorities in that jurisdiction must ensure that the relevant AML laws and regulations in that jurisdiction are fully complied with. It added that although it had identified some areas for improvement, it did not believe that Standard Chartered’s Hong Kong presence had any issues that could cause “significant supervisory concerns”.
The Hong Kong market is the largest originator of commercial US dollar transactions cleared through Standard Chartered Bank New York.
“The HKMA has asked SCBHK to render whatever assistance necessary to SCBNY in this matter,” said the HKMA in a statement. “We have also required SCBHK to take appropriate actions regarding the affected customers and to minimise possible disruptions to their day to day operations.”