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In a bold defiance of US trade sanctions, UK’s Standard Chartered Bank did business with Iran for nearly 10 years—and schemed with the despotic regime to hide the transactions, New York’s top bank regulator said yesterday.
Standard Chartered illegally cleared about 60,000 Iranian transactions worth $250 billion through its New York branch, the state’s Department of Financial services charged in an order.
The action by the DFS could lead to the revocation of Standard Chartered’s New York banking charter.
Standard Chartered “left the US financial system vulnerable to terrorists, weapons dealers, drug kingpins and corrupt regimes,” the agency said.
The London based bank cleared transactions for Iran’s Central Bank, among others, falsifying wire payments to avoid detection. It earned hundreds of millions of dollars for its efforts, said DFS.
Agency boss Benjamin Lawsky called Standard Chartered a “rogue institution” and said that the bank showed “contempt” for US banking rules.
That contempt was on display in October 2006, when the bank’s CEO for the Americas wrote to the group executive director for risk in London — worried about what he called potential “catastrophic reputational damage” to the bank if the Iranian business continued.
“You f—ing Americans,” the executive fired back, according to a memo quoted in the DFS order. “Who are you to tell us, the rest of the world, that we’re not going to deal with Iranians?”
The executive was not identified.
Standard Chartered, in a statement, said the DFS order doesn’t present“ a full and accurate picture of the facts.”
It said 99.9 percent of its Iranian transactions complied with regulations and that it ceased all new business with Iranian customers over five years ago.
Standard Chartered is a big player in international trade, clearing as much as $190 billion a day, said Stefanie Ostfeld, a policy adviser at Global Witness, a group that tracks money laundering and corruption involving natural resources around the globe.
All trade involving dollars must go through the US, she said. Iran’s main export is oil, which is traded in dollars.
In the past three years several other European banks, including Credit Suisse, Lloyds Bank, ABN Amro, Barclays, ING and HSBC have been caught doing business with Iran illegally.
But Standard Chartered’s $250 billion business is the largest amount to date.
“We need to see criminal prosecutions against individuals at high levels in the bank who are knowingly involved,” said Ostfeld. “As long as fines can be considered the cost of doing business, it keeps getting repeated.”
Iran is one of three governments currently sanctioned by the US for activities related to terrorism and the proliferation of weapons of mass destruction.
While many banks eventually backed off from dealing with Iran, the UK bank viewed the departures as a market opportunity, according to documents and emails obtained in the DFS probe.
Standard Chartered has been ordered to appear before DFS on Aug. 15 to demonstrate why its license should not be revoked.
Lawsky also wants the bank to pay for an independent monitor.
mcelarier@nypost.com