Recently, the global banking giant Standard Chartered had been accused by New York because of over 60,000 unrevealed transactions with the Iranian Government that involves a tremendous US$250 billion and revealing the US financial system to drug kingpins, weapon dealers and terrorists. The UK-based bank has also been exposed to have deficient money laundering controls in its outsourcing of job to India.
The New York state department said that for almost 10 years, 60,000 hidden transactions of Standard Chartered Bank or SCB worked with Iranian Government and conceal from regulators, that includes at least US$250 billion and collecting SCB hundreds of millions of dollars in fees. SCB business left the U.S. financial system sensitive to weapon dealers, corrupt regimes, drug kingpins, terrorists and cheated law enforcement investigators of important data used to monitor all criminal actions.
In May 2010, SCB convinced the Department that it would take quick response on issues that currently lifted by the U.S. OFAC or the Office of Foreign Assets Controls. In 2011, the state department’s last regulatory testing of the banks’ New York branch analyzed persisting and familiar Banking Secrecy Act/Anti-Money laundering flaws. With no proof of any communication or oversight among the New York and Chennai department, the bank was outsourcing its whole OFAC compliance process for the New York office towards Chennai, India.
The OFAC which is a part of the U.S. Department of Treasury is the assigned government agency for arranging a list of entities with whom U.S. citizens and items are blocked from doing any business. The other flaws involving the OFAC compliance system that lacked the ability to determine variations and misspellings of names on the OFAC authorized records. Before the release of funds for transactions with parties whose names correspond the OFAC-sanctioned list, there were no documented records of investigations.
On July 17, the order against Standard Chartered by New York state was nearly at the heel of the United States Senate’s Permanent Committee on Investigations report, that accusing another UK-based global bank HSBC in revealing the U.S. financial system to money laundering and terrorists financing liabilities. HSBS’s employee in India had come within the scanner for deficiencies in their objective as offshore reviewers of the global banking giant’s agreement to safety mechanism across terrorist financing and money laundering.
HSBC’s AML or Anti-Money Laundering Compliance Department with employees in India as the Senate sub-committee investigations found that it has deficiencies and highly inadequately staffed with the quality of the work done by the HSBC’s offshore reviewers in India that has been utilized for clearing a major backlog of unwanted transaction alerts at the firm. Its order against Standard Chartered uses a broad investigation included the review of over 30,000 pages of documents with internal SCB e-mails that determine egregious and willful violations of law stated by the New York State Financial Services Department.
REFERENCES:
http://profit.ndtv.com/news/corporates/article-us-state-charges-stanchart-with-250-bn-secret-deals-with-iran-308902
http://www.telegraph.co.uk/finance/newsbysector/banksandfinance/9456638/Standard-Chartered-exposed-US-to-terrorists-with-250bn-in-Iran-transactions.html
http://profit.ndtv.com/news/corporates/article-us-state-charges-stanchart-with-250-bn-secret-deals-with-iran-308902
