Companies & Sectors
Standard Chartered to pay $327 million to settle US sanctions case

Standard Chartered will pay $327 million to settle charges it violated for US sanctions on Iran, Myanmar, Libya and Sudan

Washington: British bank Standard Chartered will pay the US $327 million to settle charges it violated US sanctions on Iran, Myanmar, Libya and Sudan, the US Treasury announced, reports PTI.
US authorities said the bank had stripped messages on financial transfers routed through US banks of information that would show the beneficiaries were businesses and entities that fell under US sanctions.
The fines from the Treasury's Office of Foreign Assets Control (OFAC) and other US federal and local regulators took to $667 million the total the bank has been charged for sanctions violations.
In August the New York state banking watchdog fined Standard Chartered $340 million in the same investigation, saying it hid 60,000 transactions with proscribed Iranian clients worth $250 billion over 10 years.
"Today's settlement is the result of an exhaustive interagency investigation into Standard Chartered Bank's attempts to violate US sanctions programs through the 'stripping' from payment messages of critical information," said OFAC Director Adam Szubin in a statement.
The sanctions avoidance involved mainly the bank's London head office and its branch in Dubai, which masked the details of messages so US authorities would not see the real identity of those sending and receiving the payments.
"As a result, millions of dollars of payments were routed through US banks for or on behalf of sanctioned parties in apparent violation of US sanctions," OFAC said in a statement.
OFAC added that the settlement also covered eight apparent violations of US sanctions on druglords. 
In August 2003, the bank wrote in a letter to the Treasury Department's Office of Foreign Assets Control that the use of cover payments for transactions related to sanctioned countries was contrary to its global instructions.
However, the bank used the cover payment method to effect billions of dollars in payments originating from Iran, Libya, Burma and Sudan through its New York branch.
During an extensive examination, the bank failed to disclose to the Federal Reserve Bank of New York and New York Department of Financial Services that it was processing billions of dollars of non-transparent payments for customers in sanctioned countries.
Due to the actions taken by the bank to remedy its conduct and its willingness to acknowledge responsibility for its actions, the Justice Department would recommend the dismissal of the criminal complaint in 24 months provided the bank fully cooperates with and abides by the terms of the deferred prosecution agreement, the Justice Department said.
In a separate agreement entered into with the Federal Reserve, Standard Chartered would have to improve its programme for compliance with US economic sanctions and anti-money-laundering requirements.


HSBC to pay $1.9 billion to settle US claims: report

The figure includes nearly $1.3 billion, a record amount for a bank, as part of a deferred prosecution agreement besides a civil fine of more than %650 million that HSBC may have to shell out

Washington: US authorities plan to announce a record $1.9 billion settlement with British bank HSBC to end allegations of money laundering, reports PTI quoting a story from The Wall Street Journal website.
The deal could be announced as early as today in New York, officials told the Journal.
Citing people familiar with the matter, the Journal said yesterday that the figure includes nearly $1.3 billion, a record amount for a bank, as part of a deferred prosecution agreement.
The London-based bank also would pay a civil fine of more than $650 million, according to people briefed on the issue, the newspaper said.
US lawmakers have accused the global bank of giving Iran, terrorists and drug dealers access to the US financial system.
Criminal investigators have been pursuing some of the same allegations highlighted in the Senate probe, the Journal noted.
HSBC in July admitted to poor anti-laundering controls.
The settlement would resolve investigations by the Justice and Treasury departments and other federal agencies, as well as the Manhattan district attorney.
As part of the HSBC settlement deal, the Journal said, citing a government official, it will admit to violating the Bank Secrecy Act and the Trading with the Enemy Act.
The US Treasury declined to comment on the Journal report.
In early November HSBC said it had increased the amount set aside for fines linked to money-laundering in the United States to $1.5 billion.
The Journal report came the same day the US Treasury announced that another British bank, Standard Chartered, would pay $327 million to settle charges it violated US sanctions on Iran, Myanmar, Libya and Sudan.
For Standard Chartered, the fines from the Treasury and other US federal and local regulators brought to $667 million the total it has been charged for sanctions violations. 


RBI’s KYC guidelines: You can now open a bank account with just one document

The latest RBI KYC guidelines for opening new bank accounts make it a lot easier for common man as only one document would suffice as proof of identity and proof of residence

The Reserve Bank of India (RBI) has come with modifications in KYC (Know Your Customer) guidelines. These modifications have been introduced as per the circular date 10 December 2012 (RBI/2012-13/322 DBOD.AML.BC. No. 65/14.01.001/2012-13). It is important to note that modifications are part of Second Quarter Review of Monetary Policy 2012-13 announced on 30 October 2012, which proposed to review the existing KYC norms for simplifying them within the provisions of PML Act/Rules and international standards.
Following are major modifications introduced in the KYC guidelines:

One document to be accepted as Proof of Identity and Proof of Residence: As per the circular, if a customer submits a document which has his identity details as well as address details, the bank should not insist on two separate documents for POA (Proof of Address) and POI (Proof of Identity). The circular says, “If the address on the document submitted for identity proof by the prospective customer is same as that declared by him/her in the account opening form, the document may be accepted as a valid proof of both identity and address”. This is indeed a significant change as customers will not be required to carry two sets of documents if one single document like passport has both address and identity details.

Introduction not mandatory for opening accounts: The latest circular has explicitly mentioned that introduction is not mandatory for opening bank accounts. The circular categorically states, “Since introduction is not necessary for opening of accounts under PML Act and Rules or Reserve Bank’s extant KYC instructions, banks should not insist on introduction for opening bank accounts of customers”. 
Acceptance of Aadhaar letter for KYC purposes: Based on the feedback received from Unique Identification Authority of India (UIDAI), RBI has instructed banks to accept Aadhaar letters for the purpose of POA, if the address provided by the account holder is the same as that on Aadhaar letter.
Other Changes: As part other important modifications introduced in the KYC guidelines, the RBI has asked banks to accept NREGA (National Rural Employment Guarantee Act) cards as an officially valid document for opening of bank accounts. Also in cases of small accounts the RBI has asked banks to open accounts to increase financial inclusion in the country. 
Read other articles from Vivek Sharma, here.
(Vivek Sharma has worked for 17 years in the stock market, debt market and banking. He is a post graduate in Economics and MBA in Finance. He writes on personal finance and economics and is invited as an expert on personal finance shows.)




3 years ago

Why these instructions are not incorporated in RBI's subsequent Master circular No.DBOD.AML.BC.No.24/14.01.001/2013-14 dated July 1, 2013

Vaibhav Dhoka

4 years ago

RBI should see that all banks across country enforce the same in word and spirit.


vivek sharma

In Reply to Vaibhav Dhoka 4 years ago

Mr Vaibhav Dhoka,

I fully agree with you. It is extremely important that KYC guidelines are implemented by all banks so that customers could benefit from it.

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