Published August 14, 2012
A Treasury Department official under President George W. Bush who enforced U.S. law on dealings with foreign countries under economic sanctions says the $340 million fine Standard Chartered agreed to pay due to its New York branch’s dealings with Iran is a disappointment.
“I am deeply disappointed by the settlement in the Standard Chartered Bank case,” James Gurule, former attorney general and former undersecretary for enforcement for the U.S. Treasury Department tells FOX Business. “Once again, no bank official has been criminally charged or held criminally liable for violating U.S. economic sanctions involving Iran.”
Standard Chartered had hoped to settle all of its U.S. probes, including with the Department of Justice and the Manhattan District Attorney. But reports indicate that settlement now appears to be weeks away.
Standard Chartered has agreed to pay a fine of $340 million to the New York Dept. of Financial Services, after superintendent Benjamin M. Lawsky charged the bank with masking more than 60,000 financial transactions amounting to at least $250 billion for Iranian state-owned banks, including its central bank and dealings with Iranian oil companies, which get $500 million a day in dollar payments.
The bank also has agreed that the conduct at issue involved transactions of at least $250 billion. The $340 million penalty is far more than the estimated $5 million in fines the U.K. bank was thought to be seeking, based on what it said were just $14 million in fines that were noncompliant. The bank has declined comment.
Last week, the New York regulator threatened to tear up the bank’s state license, as Standard Chartered was accused of aiding a regime seeking nuclear weapons and has questioned whether the U.S. perpetrated the 9/11 attacks. The New York regulator has also questioned the U.K. bank’s dealings with Sudan, Libya and Myanmar.
Gurule, now a professor of law with the University of Notre Dame, adds: “The $340 million ‘civil’ monetary penalty is substantially less than the $617 million criminal final imposed on ING Bank in June 2012, even though both the number of transactions involved (60,000) and the value of the transactions ($250 billion) far exceed those alleged against ING Bank.”
Standard Chartered chief executive Peter Sands held a conference call last week with the media downplaying the allegations, which were based on information found in 30,000 pages of documents the bank turned over to U.S. officials.
While Standard Chartered Bank maintained that 99.9% of its Iranian financial transactions were lawful, Gurule noted that in the bank’s own documents it turned over, “senior bank officials expressed concern that engaging in such transactions could subject management in the U.S. and London ‘to personal reputational damages and/or serious criminal liability.’”
An upcoming hearing, where Standard Chartered officials would likely have had to explain to New York Financial Services officials why, as Gurule says, “they were concerned that these ‘lawful’ transactions could subject them to serious criminal liability” has been cancelled.