StanChart being victimised, says UK banking regulator
09 August 2012
Standard Chartered Bank, fighting US allegations of laundering over Iranian oil money for over a decade, received substantial backing from the UK's central bank on Wednesday.
Bank of England governor Mervyn King criticised New York financial regulators on Wednesday for unilaterally accusing Standard Chartered of illegally laundering oil money for Iran, even as StanChart chief executive Peter Sands denied claims of systematic sanctions-busting.
On Monday, the New York State Department of Financial Services accused Standard Chartered of laundering $250 billion of Iranian oil money over a decade in defiance of an American order prohibiting such transactions. The bank admits violations totalling $14 million, but says these were not deliberate.
StanChart rejected the US investigators' central accusation that bank officials had conspired with Iran to evade US sanctions by systematically removing Iranian identification from wire transfers of Iranian cash cleared through its New York office.
StanChart offered a partial apology in a conference call with journalists, admitting the bank had violated US sanctions law in about 300 transactions from 2001 to 2007. But he billed these as errors rather than calculated fraud.
"There was no systematic attempt to circumvent sanctions," Sands said, describing the 300 cash transfers as "clearly wrong and we are sorry that they happened". But he described the New York regulators' wider accusations as groundless.
Standard Chartered has operated on Wall Street since 1976 but could lose its US licence if found guilty of sanctions-busting. Sands said the charges of wrongdoing had already caused unfair damage to the bank's reputation.
The London-based bank lost more than a quarter of its market value in 24 hours after the New York State Department of Financial Services threatened late on Monday to strip it of its state banking licence, dubbing it a "rogue institution" for breaking US sanctions against Iran.