Zim bank hit with US$18 million fine for violating American sanctions

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By Robert Tapfumaneyi

STANDARD Chartered Bank Zimbabwe, is set to pay a US$18 million fine to the US Financial Conduct Authority (FCA) for violation of sanctions regulations.

The sanctions busting activities and breaches of anti-money laundering (AML) rules happened between May 2009 and July 2013 according to a statement from the Office of Foreign Asset Control (OFAC).

In a statement OFAC said the punishment is for over 1 795 transactions worth close to US$77 million that were done by Standard Chartered Bank New York and Standard Chartered Bank Zimbabwe.

“Between May 2009 and July 2013, Standard Chartered Bank Zimbabwe processed transactions to or through the United States involving Zimbabwe-related Specially Designated Nationals (SDNs) or entities owned 50 percent or more, individually or in the aggregate, by one or more Zimbabwe-related SDNs,” OFAC said.

“These transactions constituted apparent violations of the Zimbabwe Sanctions Regulations (ZSR), 31 C.F.R. Part 541. Standard Chartered Bank will remit US$18 016 283 to OFAC to settle civil liability relating to the apparent violations of the ZSR.”

The OFAC statement added: “Standard Chartered and its Zimbabwe unit (SCBZ) appear to have had actual knowledge regarding customer relationships that SCBZ maintained with persons identified on the SDN List over a period of several years.”

Mark Steward, director of enforcement and market oversight at the FCA said, Standard Chartered’s oversight of its financial crime controls was narrow, slow and reactive.

“These breaches are especially serious because they occurred against a backdrop of heightened awareness within the broader, global community, as well as within the bank, and after receiving specific attention from the FCA, US agencies and other global bodies about these risks.” Steward said.

“Standard Chartered is working to improve its AML controls to ensure all issues are fully addressed on a global basis.

“The FCA has taken into account Standard Chartered’s remediation work and its cooperation in assisting the FCA investigation, without which today’s financial penalty would have been even higher.”

The US slapped former President Robert Mugabe and his administration with sanctions after enacting the Zimbabwe Democracy and Economic Recovery Act (ZIDERA) in 2001 over allegations of human rights abuses as well as electoral fraud.

The sanctions have been renewed every year including two months ago, despite Mugabe having been replaced by President Emmerson Mnangagwa, and an apparent thawing of relating between Harare and Washington.

The US$18 million fine is part of a broader US$639 million settlement between Standard Chartered and OFAC as part of a combined US$1,1 billion settlement with federal, State, local, and United Kingdom government partners.

US ambassador to Zimbabwe Brian Nichols this week said the sanctions are “a path” for the normalisation of relations between Zimbabwe and his country adding the measures have ” no economic impact.”