The UK Financial Conduct Authority has fined Standard Chartered Bank (SCB) £102,163,200 for anti-money laundering violations in the bank’s UK Correspondent Banking business and UAE branches between 2009 and 2014. The FCA determined that SCB had inadequate anti-money laundering controls relating to account monitoring and customer due diligence, and that the bank’s internal assessment of its AML controls fell short of the requirements of the Money Laundering Regulations of 2007, exposing SCB to the risk of enabling sanctions evasion, money laundering and the financing of terrorism. The FCA found that the bank had failed to collect sufficient information about customers whose conduct should have raised red flags, such as allowing an account to be opened with over £500,000 in cash without investigating the origin of the funds, and not reviewing due diligence on a customer despite evidence of a blocked transaction from another bank pointing to possible links with a sanctioned entity. The FCA also determined that SCB fell short of the Money Laundering Regulations because it did not require the same standards of due diligence and monitoring by the bank’s non-European Economic Area branches and subsidiaries, as it did in the UK.
SCB did not dispute the FCA’s findings, thereby qualifying for a 30% discount on the financial penalty. The FCA noted that the bank is working to improve its AML controls.
Today’s FCA enforcement action was coordinated with enforcement authorities in the United States, reaching a global settlement of $1.1 billion with the US Department of Justice, the Securities and Exchange Commission, the Federal Reserve Board, the Office of Foreign Assets Control of the US Department of the Treasury, and the New York State Department of Financial Services.