StanChart apologises to US about Iran sanction violation statement
22 March 2013
Standard Chartered Bank has been forced to apologise for blaming its £415 million fine for sanctions-busting on 'clerical errors'.
Standard Chartered chairman Sir John Peace admitted that the bank's earlier claims that there was no deliberate breach of US sanctions by its staff were "inaccurate at best".
US regulators forced the Sandhurst-educated 64 year old to retract the comments, which protected the bank against prosecution and further punishment.
According to commentators, more than anything else the consequences of being stripped of its licence to trade in the US, which would have come as a crippling blow, could have weighed heavy on the lender.
The emerging markets specialist, widely known in the UK for its sponsorship of the Liverpool Football Club, was accused of deliberate breach of US sanctions against a number of the world's most brutal regimes, including Iran, Sudan and Libya.
The US Department of Justice said the lender "knowingly and willfully engaged in this criminal conduct", 'moving millions of dollars illegally through the US financial system' on behalf of rogue clients.
However at a press conference earlier this month Sir John Peace presented a totally different version of events in his defense of the bank's decision to not strip staff of any bonuses over the scandal.
He said, "We had no willful act to avoid sanctions; you know, mistakes are made - clerical errors - and we talked about last year a number of transactions which clearly were clerical errors or mistakes that were made."
Peace, who was knighted in 2011 for services to business and the voluntary sector, was forced to retract these comments and apologise yesterday.
In a statement issued to the stock market, he said, "I made certain statements that I very much regret and that were at best inaccurate. My statement that SCB (Standard Chartered Bank) 'had no willful act to avoid sanctions' was wrong, and directly contradicts SCB's acceptance of responsibility in the deferred prosecution agreement and accompanying factual statement."
The settlements by Standard Chartered that spanned the period 2001 and 2007, covered transactions for customers in sanctioned countries Iran, Sudan, Libya and Burma.
The bank was accused by US authorities of leaving out information from US dollar wire payments, preventing regulators from identifying suspicious activity.
Prior to the settlement of the case with criminal authorities in December, New York banking regulator Benjamin Lawsky in a separate action threatened to revoke the bank's license over the conduct.
The move angered UK politicians and regulators, and US regulators who had spent over two years investigating the bank and wanted a more coordinated settlement before Lawsky's making his accusations public in August.
According to commentators the demand by US authorities for the lender's public apology came as further evidence of their tough stance on the issue and was a warning shot to other banks.