StanChart given high-risk client ban in $300m settlement

Standard Chartered has been banned from dealing in US dollars with some clients following its $300m (£180.5m) settlement with US regulators for poor action on money laundering.

The FTSE-listed bank has stopped dollar clearing services for small and medium-sized business clients that could be suspect in Hong Kong and the United Arab Emirates as part of an out-of-court agreement announced yesterday.

The FT reports New clients for dollar clearing will have to be approved in advance by the New York State Department of Financial Services.

The American regulator’s superintendent of financial services, Benjamin Lawsky, says there should be consequences if a bank fails to live up to its commitments. 

“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.” 

The latest censure will put pressure on chief executive Peter Sands, who has taken the flack for a sinking share price and poor performance in the past couple of years.

Just two years ago Standard Chartered was fined $667m for its obfuscation of $250bn in transactions with Iran, which contravened US sanctions.

That deal included the instatement of an independent monitor to ensure money-laundering compliance within two years.

During the 24-month review, the monitor found weaknesses in Standard Chartered’s suspicious transactions systems, especially in the United Arab Emirates and Hong Kong.

The independent monitor will continue to watch over the bank for two more years.