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.


Oil edges up on looming Iran sanctions, but US-China trade war caps gains

Updated 47 min 51 sec ago
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Oil edges up on looming Iran sanctions, but US-China trade war caps gains

  • Other producers may struggle to fully make up for the expected fall in Iranian supply
  • But overall global oil supply was currently enough to meet demand

SINGAPORE: Oil prices edged up on Monday, as markets were expected to tighten once US sanctions against Iran’s crude exports are implemented next month.
Front-month Brent crude oil futures were trading at $79.88 a barrel at 0248 GMT, 10 cents above their last close.
US West Texas Intermediate (WTI) crude futures were at $69.31 a barrel, 19 cents above their last settlement.
Also in the United States, Intercontinental Exchange said its new Permian West Texas Intermediate crude futures contract deliverable in Houston, Texas, will begin trading on Monday.
The main price driver in Asia on Monday was the looming start of US sanctions against Iran’s oil exports, which will start on November 4.
While the Organization of the Petroleum Exporting Countries (OPEC) agreed in June to boost supply to make up for expected Iran disruptions, an internal document reviewed by Reuters suggested that OPEC is struggling to add barrels to the market as an increase in Saudi Arabian supply was offset by declines in Iran, Venezuela and Angola.
Fatih Birol, executive director of the International Energy Agency, said on Monday that other producers may struggle to fully make up for the expected fall in Iranian supply, and that coupled with strong demand, oil prices could rise further.
Traders said major oil consumers were stockpiling in anticipation of more disruptions.
“In China, higher seasonal demand and suspected stockpiling are occurring, while similarly the US and the OECD continue building stockpiles ahead of potential supply disruptions this winter,” said Stephen Innes, head of trading for Asia/Pacific at futures brokerage Oanda in Singapore.
Despite this, Innes said overall global oil supply was currently enough to meet demand.
There were also some signs of rising output, especially in North America.
US drillers added four oil rigs in the week to Oct. 19, bringing the total count to 873, Baker Hughes energy services firm said on Friday, raising the rig count to the highest level since March 2015.
The US rig count is an early indicator of future output. With activity rising again after months of stagnation, US crude production is also expected to continue to rise.
Looking further out, concern that the trade dispute between the United States and China would crimp economic growth may weigh on the outlook for oil prices.
“The full impact of the US-China trade war will hit markets in 2019 and could act as a considerable drag on oil demand next year, raising the possibility of the market returning to surplus,” said Emirates NBD bank in a note.
Shipping brokerage Eastport said on Monday that “Chinese manufacturing is beginning to slow” and that “Trump’s proposal of slapping ... tariffs on additional ... Chinese goods from 1 January would be a further drag on trade.”