StanChart agrees extension of US sanctions scrutiny
StanChart agrees extension of US sanctions scrutiny
StanChart first entered into the agreements with the US Department of Justice and the New York County District Attorney’s Office in December 2012, accepting that it had broken laws by processing payments for sanctioned entities in countries including Iran, Burma, Sudan and Libya.
The bank avoided prosecution in exchange for a cash settlement of $327 million (SR1.22 billion) and an agreement with the US authorities to improve its sanctions compliance.
The DPAs were extended for a further three years in 2014, as StanChart sought to strengthen its controls under the scrutiny of an independent monitor tasked with reporting on its progress.
Reuters reported in September the likely extension of the bank’s US supervision, as sources at the bank said upgrading its technology worldwide to meet stringent US standards was proving a daunting task.
The monitor appointed to oversee StanChart’s settlement, Ellen Zimiles, global head of investigations at Navigant Consulting Inc. and a former prosecutor, has tested the software used by the bank and found that the bank’s processes missed millions of possible violations.
StanChart said on Thursday its DPA will now end at the same time as the independent monitor’s oversight on July 28, 2018.
“The agreement acknowledges that the Group has taken a number of steps and made significant progress to comply with the requirements of the DPA and enhance its sanctions compliance program, but that the program has not yet reached the standard required by the DPA,” it said.
In a deferred prosecution agreement a prosecutor agrees to grant amnesty in exchange for the defendant agreeing to fulfill certain requirements, and StanChart could face prosecution and further fines if it reoffends.
The bank is also being investigated over whether it continued to violate Iran-related sanctions after 2007, in violation of the deferred prosecution agreements between the bank and US state and federal prosecutors.
Thursday’s statement from the bank said it continues to cooperate with that investigation, but that more time is needed.
StanChart says it now spends more than a billion dollars a year on compliance, up more than 40 percent from 2014.
Two US airlines cut China routes as Beijing rivals turn up heat
- ‘The two China routes ... have been colossal loss makers for us’
- Chinese passengers arriving at US airports are expected to nearly triple to 12.8 million in 2024 from 4.3 million this year
DENVER/SHANGHAI: Two US airlines on Tuesday cut routes between China and the US, underscoring increasingly tough competition from state-backed Chinese rivals as they aggressively expand their fleets with cut-price tickets.
American Airlines, the largest US carrier by passengers, said it would drop a route between Chicago and Shanghai, canceling the second direct flight from the US city to China in four months. It had canceled a flight to Beijing in May, although it still operates daily flights to the capital from Los Angeles and Dallas-Fort Worth, Texas.
“The two China routes ... have been colossal loss makers for us,” said Vasu Raja, vice president of network and schedule planning, adding that high fuel costs had also made the route unsustainable.
Hawaiian Airlines said it would from October suspend its thrice-weekly nonstop service between Honolulu and Beijing, which it opened in 2014, citing slower-than-expected growth in demand.
Competition from Chinese airlines is expected to grow with the anticipated easing of China’s near-decade-old “one route, one airline” policy, which would allow more local airlines to fly long-haul international routes.
“US airlines are at a severe disadvantage,” said Mike Boyd, president of aviation forecaster Boyd Group. “The majority of demand is China-generated, and that gives Chinese carriers the advantage.”
Chinese passengers arriving at US airports are expected to nearly triple to 12.8 million in 2024 from 4.3 million this year, and the profile is shifting from groups to independent travelers, according to Boyd Group.
United Airlines President Scott Kirby said Shanghai and Beijing had rebounded for the airline after several years of weakness, although revenue per available seat mile (RASM) was below levels of two or three years ago.
“We’ve had several years of weakness as there was an awful lot of capacity growth out of Beijing and Shanghai,” Kirby said on the sidelines of the International Aviation Forecast Summit in Denver.
American and Hawaiian said the route cancelations were unrelated to demands placed by China’s civil aviation regulator on foreign airlines to amend the way they referred to Hong Kong, Macau and Taiwan on their websites.
Chinese state media had earlier this month singled out the two companies and other US airlines as being among the last firms to comply with China’s demands.
“That issue of how Taiwan was displayed on our website had absolutely zero impact on this decision,” Hawaiian’s chief executive, Peter Ingram, said. “Our economic evaluation was well underway long before that issue arose.”