Executive Summary

Standard Chartered, a major UK-based international bank, was found to have processed thousands of transactions that violated US sanctions, primarily involving Iranian and other sanctioned entities, by stripping or manipulating payment messages and failing to maintain effective screening. Across multiple enforcement actions from 2012 onwards, the bank paid several billion dollars in combined penalties to US and UK authorities and agreed to ongoing remediation and monitoring.

Background: Global Network, High Sanctions Exposure

Standard Chartered has a strong presence in Asia, the Middle East and Africa and has historically handled large volumes of US dollar clearing through the US. This business model created significant exposure to US sanctions regimes administered by OFAC, particularly where clients in sanctioned countries attempted to access the US financial system via correspondent banking arrangements.

Timeline of Key Events

• Early 2000s: Standard Chartered processes US dollar transactions for Iranian and other sanctioned clients.
• 2001–2007: Payment messages are altered or stripped to remove references to sanctioned entities when routed through the US.
• 2012: US authorities announce a major settlement with Standard Chartered for sanctions breaches; hundreds of millions in penalties are paid.
• 2014–2018: Further investigations reveal additional control weaknesses and breaches, including violations involving other high-risk jurisdictions.
• 2019: Additional settlements with US and UK regulators lead to total sanctions-related penalties reaching into the billions.

Key Sanctions & AML Control Failures

Red Flags That Should Have Prompted Stronger Actions

• Payments involving Iranian, Sudanese and other sanctioned counterparties routed through US dollar clearing.
• Alterations to payment instructions that removed originator or beneficiary information.
• Inconsistent sanctions screening results across different locations and systems.
• Internal concerns raised about sanctions risks in certain regions or business lines.
• Regulatory feedback and industry enforcement trends clearly highlighting sanctions exposure.
• Lack of end-to-end ownership for sanctions risk management across jurisdictions.

Penalties, Settlements & Long-Term Outcomes

Over the course of several enforcement actions, Standard Chartered faced:

• Combined sanctions-related penalties and settlements totaling in the billions of dollars across multiple US and UK agencies.
• Deferred Prosecution Agreements and parallel arrangements requiring extensive remediation and cooperation.
• Appointment of independent monitors and enhanced reporting obligations.
• Comprehensive upgrades to sanctions screening, governance and training frameworks.
• Significant reputational damage as a high-profile example of sanctions non-compliance.

Lessons for Sanctions, KYC & AML Professionals

• Sanctions obligations apply globally when using US dollars or US-linked payment infrastructure.
• Message stripping or information manipulation is a clear sanctions evasion red flag and a serious offence.
• Sanctions screening tools must be correctly configured, tested and kept up to date with all relevant lists.
• High-risk regions and sectors require strict onboarding, EDD and escalation governance.
• Remediation must be comprehensive and timely; half-measures prolong risk and increase penalties.
• Culture and tone-from-the-top matter – sanctions compliance cannot be treated as a “technicality.”

GO-AKS Insight

“The Standard Chartered sanctions cases demonstrate that regulators treat deliberate evasion and weak sanctions governance as extremely serious violations. For sanctions and AML professionals, this case underlines the importance of message integrity, end-to-end screening coverage and a strong culture of escalation when sanctions risks are identified.”