Standard Chartered fined £102m over AML controls

In the second largest financial penalty for AML controls failings ever imposed by the UK’s regulator, the Financial Conduct Authority has fined Standard Chartered Bank £102,163,200 for breaches in two high risk areas of its business: the UK Wholesale Bank Correspondent Banking business and its branches in the United Arab Emirates.

The watchdog found serious and sustained shortcomings in the bank’s controls relating to customer due diligence and ongoing monitoring. It failed to establish and maintain risk-sensitive policies and procedures, and failed to ensure its UAE branches applied UK equivalent AML and counter-terrorist financing controls.

Standard Chartered’s failings occurred in its UK Correspondent Banking business during the period from November 2010 to July 2013 and in its UAE branches during the period from November 2009 to December 2014.

Director of enforcement and market oversight at the FCA, Mark Steward said the bank's oversight of its financial crime controls was narrow, slow and reactive. "These breaches are especially serious because they occurred against a backdrop of heightened awareness within the broader, global community, as well as within the bank, and after receiving specific attention from the FCA, US agencies and other global bodies about these risks," he added.

“Standard Chartered is working to improve its AML controls to ensure all issues are fully addressed on a global basis. The FCA has taken into account Standard Chartered’s remediation work and its cooperation in assisting the FCA investigation, without which today’s financial penalty would have been even higher.”

Standard Chartered did not dispute the FCA’s findings and exercised its right, under the FCA’s partly contested case process, to ask the FCA’s Regulatory Decisions Committee to assess the appropriate level of sanction. Its agreement to accept the findings meant it qualified for a 30% discount. The fine would otherwise have been £145,947,500.

Separately, US authorities have taken action against the Standard Chartered Group for violations of domestic sanctions laws and regulations there.

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