A New York court’s filings allege that between 2008-2013, Standard Chartered Bank, a major UK lender, conducted thousands of transactions totaling over $100 billion in violation of Iranian sanctions. An independent expert claims to have identified $9.6 billion of those transactions involving foreign exchange dealings with entities and individuals the US government has designated as funders of terrorist groups like Hezbollah, Hamas, al-Qaeda, and the Taliban. The bank now faces scrutiny over potential sanctions breaches and financial ties to organizations considered terrorist sponsors during that period, the BBC reported on Tuesday.
In addition to allegedly sponsoring the worst terrorist groups on the planet, Standard Chartered has also been the main shirt sponsor for the Liverpool Football Club since 2010, with their latest sponsorship deal that was signed in 2022 netting Liverpool over $64 million annually, the Liverpool Echo reported. This lucrative sponsorship is set to expire at the end of the 2026/27 season. Liverpool ended its 2023-24 Premier League season in third place, behind Manchester City and Arsenal.
4 TAKEWAYS
The allegations against Standard Chartered Bank regarding sanctions violations and transactions linked to terrorist groups are extremely serious. Here are some key points regarding this situation:
- Violating US sanctions on Iran by processing transactions worth billions of dollars from 2008-2013 would be a major legal and compliance failure for the bank.
- The claim that $9.6 billion in transactions involved entities designated by the US as terrorist organizations like Hezbollah, Hamas, al-Qaeda, and the Taliban is especially alarming and could have severe legal repercussions.
- If the allegations are proven true, Standard Chartered could face massive fines, potential criminal charges, loss of banking licenses, and lasting reputational damage.
- This raises broader concerns about the effectiveness of sanctions programs and the challenges the UK and the US face in supervising their implementation across their banks’ global operations.
WHISTLEBLOWERS
Two whistleblowers, Julian Knight and Robert Marcellus, have filed a motion to revive a previously dismissed lawsuit against Standard Chartered Bank. Knight, a former global head of foreign exchange transaction banking who left in 2011, and Marcellus, a currency trader, run Brutus Trading which was formed to pursue claims against the bank.
In their court filing last week, they assert that through forensic data analysis, they have “decloaked” information “hidden deep” in Standard Chartered’s electronic spreadsheets. This data, which was provided to US authorities in 2012-2013, allegedly shows “countless illegal transactions” by the bank in violation of sanctions.
The whistleblowers claim the spreadsheet data, analyzed with help from forensic investigator David Scantling, revealed previously “hidden transactions” that demonstrate the bank’s sanctions breaches. Standard Chartered has denied the allegations.
By attempting to set aside the earlier judgment dismissing their lawsuit, Knight and Marcellus are seeking to revive their legal efforts against the bank based on this newly analyzed data.
THIS IS NOTHING NEW
The allegations against Standard Chartered regarding sanctions violations are not entirely new, The Telegraph reported. In 2012, the bank’s dealings with Iran had already drawn significant scrutiny. At the time, George Osborne, who was the bank’s chancellor, was summoned to the US to meet with then Federal Reserve Chairman Ben Bernanke over Standard Chartered’s criminal bypassing of sanctions against Iran.
The New York banking regulator Benjamin Lawsky had even threatened to revoke the bank’s US license. To avoid criminal prosecution, Standard Chartered ultimately agreed to pay $340 million in civil penalties and $227 million to the Justice Department to avoid criminal charges.
More than a decade later, these new court filings by whistleblowers are raising fresh questions about the UK government’s judgment and role in helping Standard Chartered seemingly get away with its outrageous sanctions-busting conduct back in 2012 through the deferred prosecution agreement.
Despite the large fines paid, the resurfacing of more detailed evidence around the extent of the bank’s illicit dealings is reigniting scrutiny over whether Standard Chartered received sufficient punitive action. The UK government now faces criticism for potentially going easy on one of its major banks at the expense of enforcing sanctions designed to cut off funding for terrorist groups.
