British Bank Settles After Hiding Iranian Transactions

The British bank accused of using its New York branch to launder money from international transaction has agreed to pay New York's top banking regulator $340 million. Regulators said the bank schemed to hide more than 60,000 financial transactions totaling $250 billion for Iranian clients. The bank denied the charges. Audie Cornish talks with Jim Zarroli.

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From NPR News, this is ALL THINGS CONSIDERED. I'm Melissa Block.

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And I'm Audie Cornish. The British bank Standard Chartered has agreed to pay $340 million to settle charges that it laundered money for Iran. The settlement was announced today by New York's top banking regulator, which brought the charges last week. The settlement came one day before a scheduled hearing over whether Standard Chartered should lose its license to operate in New York.

For more on this story, NPR's Jim Zarroli joins me now. And, Jim, explain what exactly Standard Chartered has agreed to do in this settlement.

JIM ZARROLI, BYLINE: As you noted, it agreed to pay a fine, $340 million. That's sort of about in line with what some of the other banks have agreed to pay in some of the other recent cases of money laundering. It also said it would allow the New York agency that filed these charges, which is the Department of Financial Services, to put a monitor in its office to oversee all the bank's international transactions.

You know, the question I think people are asking is how effective this monitor is going to be given the size of the bank. It's the sixth largest bank in Britain. It's a huge global enterprise, does a lot of transactions, so we'll have to see.

CORNISH: And remind us the background here. What exactly is the bank accused of doing?

ZARROLI: Well, the charges that came out last week said that - I think it actually accused Standard Chartered of being a rogue institution. It said the bank was funneling Iranian money in and out of its New York branch. Of course, that would be in violation of the economic sanctions that the United States has in place against Iran. The regulators said they did this for years. There were 60,000 transactions and it even allegedly - the bank - the regulator said it taught its employees how to conceal what they were doing from regulators.

So at least as spelled out in the order, it wasn't just a few employees skirting the law. It was a lot broader than that. And the regulators also said there was evidence that the bank may have laundered money for other countries on the sanctions list, like Libya and Myanmar.

CORNISH: But, when the charges were announced, Standard Chartered denied that it had done anything wrong, so with this settlement, is the bank now conceding that it broke the law?

ZARROLI: Yeah. When the charges were filed, Standard Chartered said these were, you know, false. It said 99.9 percent of the transactions that regulators referred to were actually completely legal. It really looked, for a while, as though they were going to fight this, so the decision to settle the case is something of a surprise.

CORNISH: Does anyone know yet or have we heard why the bank decided to settle?

ZARROLI: No. They haven't said. I mean, you know, I think it's a safe bet. They had a hearing coming up tomorrow at which they would have to explain why they shouldn't have their license taken away. They're a big global bank. A big global bank needs to have a presence in New York, which is still really, you know, arguably the center of the financial universe, so they had a lot at stake here.

CORNISH: So what happens next for Standard Chartered? Does this close the case?

ZARROLI: It closes the New York case, but it has to be said, Standard Chartered is also under investigation, we know, by some other agencies, U.S. agencies, the Justice Department, the FBI, the Fed. You know, some of these agencies actually - when the order was announced last week, they were kind of angry that New York state had come out with these charges so soon and sort of jumped the gun because they were trying to reach a settlement with Standard Chartered and they thought that this undermined that.

Now, they are not part of the settlement that was announced today, so at least, in theory, they could still come back with additional charges against the bank, although, you know, as I said, there have been reports that they are trying to settle the charges, as well.

CORNISH: NPR's Jim Zarroli speaking with us from New York. Thank you, Jim.

ZARROLI: You're welcome.

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