US slaps StanChart Zim with $18m fine

(Last Updated On: April 11, 2019)


Standard Chartered Zimbabwe has been fined US$18m after its UK-headquartered parent company was slapped with a US$1bn fine for violating US sanctions against Zimbabwe and other countries.

The US Office of Foreign Assets Control, which imposed sanctions on Zimbabwe nearly two decades ago, announced on Tuesday that it had penalised Standard Chartered for inadequate financial crime control.

Standard Chartered will also pay £102m to Britain’s Financial Conduct Authority (FCA).

“As part of a combined US$1.1bn settlement with federal, state, local, and United Kingdom government partners, the US Department of the Treasury’s Office of Foreign Assets Control (OFAC) today [Tuesday] announced a US$639m agreement with Standard Chartered Bank (SCB) to settle its potential civil liability for apparent violations of US economic sanctions.

“[Tuesday’s] settlement resolves OFAC’s investigation into apparent violations of a number of US sanctions programmes, including those relating to Burma, Cuba, Iran, Sudan, and Syria. OFAC is also settling a separate case involving apparent violations by SCB of sanctions related to Zimbabwe,” reads a statement released by OFAC.

“Separately, between May 2009 and July 2013, SCB Zimbabwe processed transactions to or through the United States involving Zimbabwe-related Specially Designated Nationals (SDNs) or entities owned 50 per cent or more, individually or in the aggregate, by one or more Zimbabwe-related SDNs. These transactions constituted apparent violations of the Zimbabwe Sanctions Regulations, 31 C.F.R. Part 541. SCB will remit $18,016,283 to OFAC to settle civil liability relating to the apparent violations of the ZSR.”

ccording to OFAC, the bulk of the settlement, US$639m, relates to breaches of US sanctions against Burma (Myanmar), Cuba, Iran, Sudan and Syria.

In 2017, OFAC fined CBZ Bank, Zimbabwe’s biggest bank by asset base, a staggering US$3.8bn for thousands of financial transactions done on behalf of ZB Bank which was then under US sanctions. CBZ appealed against the measures, and the matter is yet to be resolved.

Zimbabwe has lost more than 60 correspondent banking relationships, making movement of funds and financial inter-mediation even more difficult.

Standard Chartered’s penalty is well below the US$8.9bn imposed by the US authorities in 2014 on BNP Paribas for conspiring to evade sanctions.

Over the last decade, the US authorities have penalised 10 banks for similar conduct, including France’s Credit Agricole, which paid US$787m in 2015, and the Amsterdam-based ING Bank, US$619m in 2012.

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