StanChart agrees extension of US sanctions scrutiny

StanChart said its US deferred prosecution agreements will now end at the same time as the independent monitor’s oversight on July 28, 2018. (Reuters)
Updated 10 November 2017
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StanChart agrees extension of US sanctions scrutiny

LONDON: Standard Chartered said it faces a further extension of its US deferred prosecution agreements (DPAs) until July next year, in a sign it has yet to improve its sanctions compliance to the satisfaction of US authorities.
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.


Hong Kong economy cools as trade tension mounts

Updated 16 November 2018
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Hong Kong economy cools as trade tension mounts

HONG KONG: Hong Kong’s economic growth slowed in the latest quarter and the government warned it could face headwinds from US-Chinese trade tension and higher interest rates.
Government data Friday showed the Chinese territory’s economy expanded by 2.9 percent over a year earlier, down from the previous quarter’s 3.5 percent.
Exports rose 5 percent over a year earlier, but the government said the impact of trade tension and weaker global demand “has begun to surface” and is “likely to become more apparent in the near-term.”
The government said Hong Kong also faces a drag from higher interest rates. The Hong Kong dollar has a fixed exchange rate with the US dollar, which requires the central bank to raise interest rates along with the US Federal Reserve even though economic growth is slowing.