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.


Kuwait Energy starts producing natural gas from field in southern Iraq

Updated 53 min 37 sec ago
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Kuwait Energy starts producing natural gas from field in southern Iraq

BASRA: Kuwait Energy PLC started producing natural gas from Siba on Wednesday, the first gas field to be brought on stream in the south of Iraq, an Iraqi oil executive said.
Siba began producing gas at an initial rate of 25 million cubic feet a day (mcf/d), which should rise gradually to 100 mcf/d by the end of the year, said Kareem Abd Oda, the director general of the joint venture established by Iraq and Kuwait Energy to develop the field.
Siba, south of the city of Basra, is producing natural gas and gas condensates, he added.
The other hydrocarbon reservoirs of southern Iraq that are already in operation produce natural gas alongside crude oil.
The gas extracted in several of these fields is burnt off instead of being captured, as the country lacks the capacity to process it into fuel for local consumption or exports.
Energy-rich Iraq is looking to boost oil and gas production with joint ventures with Kuwaiti, Turkish and Egyptian firms, as it rebuilds its economy following years of turmoil, including the takeover of large parts of the country by Daesh in 2014.
The semi-autonomous Kurdistan Regional Government has started producing natural gas from fields in northern Iraq.
Iraq hopes by 2021 to end gas flaring, which costs nearly $2.5 billion in lost revenue for the government and would be sufficient to meet most of its unmet needs for gas-based power generation, according to the World Bank.
Iraq holds on Thursday an auction of oil and gas exploration contracts in 11 blocks alongside the border with Iran and Kuwait and in offshore Gulf waters. The new contracts set a time limit for companies to end gas flaring from oilfields they develop.
Iraq is the Organization of the Petroleum Exporting Countries’ second-largest producer after Saudi Arabia.
Companies including BP, Exxon Mobil, Eni , Total, Royal Dutch Shell and Lukoil helped Iraq expand production in the past decade by more than 2.5 million barrels per day (bpd) to about 4.7 million bpd.
Iraq’s crude exports from its southern region on the Gulf have averaged 3.5 million bpd so far in April, two oil executives told Reuters on Wednesday.
That is higher than the March average of 3.45 million bpd.