Sun, 18th Aug 2019
Standard Chartered is to face a significant fine from the Treasury over failure to prevent sanctions breaches.
The Office of Financial Sanctions Implementation has informed Standard Chartered that it plans to fine them in excess of £10 million in the coming weeks. While it is possible for Standard Chartered to appeal the fine, they news will put additional pressure on the board, who are already facing disputes with investors over the pay package enjoyed by the chief executive.
A source close to the board said that while the fine would have a serious reputation on the bank, in financial terms it is essentially immaterial. The bank has already been hit by penalties that add up to more than £800 million from regulators located in both London and New York for violating sanctions against Iran. The OFSI is a part of the treasury, but it has a comparatively low profile, and has not imposed a lot of financial penalties.
The reasoning behind the OFSI’s decision is unclear at this time, and it is likely that Standard Chartered will appeal, purely to protect their reputation. Standard Chartered is accused of having opened an account with what was essentially the equivalent of more than £500,000 in a suitcase in the Middle East, and that there was not sufficient evidence to show that the origin of the funds used to open the account had been investigated. The FCA called the bank's oversight and measures to prevent financial crime narrow, slow and reactive.