Richard Moorhead toys with ethical dilemmas & regulatory barriers
Whether the Standard Chartered Bank (SCB) allegations have been sexed up to aid the US in its geopolitical battle for financial supremacy or not, they raise interesting concerns as regards the role of professionals in the process. In broad terms, the bank stands accused of “wire-stripping” information from transactions with Iranian clients involving perhaps $250bn and earning the bank hundreds of millions of dollars in fees. Crucially to the politics of the situation, the transactions are not just alleged to be sanction busting: some of SCB’s client banks are claimed to finance terrorist groups.
Due diligence?
The allegations centre on removing information that would have flagged the payments as Iranian from the wire transfer messages to prevent the payments being flagged and investigated in the US to see if they breached sanctions rules. SCB’s case appears to be that the payments were of a type not subject to sanctions (so-called U-turn transactions permitted until 2008), and had been subject to the necessary due diligence outside of NY. They were stripped of the identification
