Statement from Superintendent of NY Department of Financial Services

The New York Department of Financial Services ("DFS") and Standard Chartered Bank ("SCB") have reached an agreement to settle claims that SCB's NY branch had violated AML obligations. The settlement stipulates that: (1) SCB will pay a civil penalty to DFS; (2) SCB will install a monitor who will evaluate SCB NY's money-laundering risk controls, and DFS examiners will be placed on site at SCB; and (3) SCB will permanently install personnel within its NY branch to oversee SCB's offshore money-laundering due diligence and monitoring.

As a result of the settlement, the parties canceled a hearing in which SCB had been expected to defend its right to maintain a license in New York. The settlement does not absolve SCB of any potential liability with respect to other U.S. authorities. In its own statement announcing the agreement, SCB stated that it "continues to engage constructively with other relevant US authorities."

[Lofchie Comment: The DFS press release concludes by saying, "We will continue to work with our federal and state partners on this matter." It is an interesting closing statement in that it is not about AML or about SCB, but as to the issue of cooperation between the various regulators.]