The U.S. Attorney's Office for the District of Columbia and the Department of Justice have decided to extend for three more years a deferred prosecution agreement reached with British bank Standard Charted Bank in 2012, finding that it has not satisfied the requirements of the original agreement—and may have even committed additional sanctions violations.
In amended documents filed in U.S. District Court in the District of Columbia Dec. 9, the U.S. Attorney’s Office for the District of Columbia and the Justice Department tacked on an independent compliance monitor, which Standard Chartered Bank (SCB) has agreed to bring on within 60 days, to ensure an effective U.S. economic sanctions compliance program, the filing stated.
“In general, the government learned through an unrelated investigation that SCB may have been unlawfully processing U.S. dollar transactions for corporate and individual customers with possible ties to U.S sanctioned countries after 2007,” the filing stated.
“Moreover, the government is analyzing 3.7 million pages of documents and hundreds of record phone calls produced to the government by SCB,” the filing stated. “The government requires additional time to determine whether violations did in fact occur and, if so, whether those violations were committed willfully and what the result should be.”
The original DPA, which would have expired Dec. 10, 2014, will now expire on Dec. 10, 2017.
In 2012, SCB agreed to forfeit $227 million to the Justice Department for conspiring to violate the International Emergency Economic Powers Act (IEEPA). The bank agreed to the forfeiture as part of a DPA entered into with the Justice Department and the New York County District Attorney’s Office for conspiring to conceal at least $250 billion in transactions with the Iranian government that were moved through its U.S. subsidiary on behalf of sanctioned entities in Iran, Sudan, Libya, and Burma from 2001 through 2007.
At the same time, SCB also reached a $327 million settlement agreement with the New York County District Attorney’s office.
As Compliance Week previously reported, those two settlement agreements came in addition to a $340 million civil penalty by the New York’s Department of Financial Services that accused the bank of willfully bypassing sanctions against the Iranian government. In August 2014, DFS issued a second civil penalty—this time for $300 million—for the bank failing to remediate anti-money laundering compliance problems required by the bank’s 2012 settlement.