StanChart faces extension of U.S. money-laundering vigilance.
| LONDON/NEW YORK
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| People walk past the head office of Standard Chartered bank in the City of London February 27, 2015. REUTERS/Eddie Keogh |
Standard Chartered expects it will remain under U.S. supervision for several more years over lapses in Iran-related anti-money laundering efforts because it needs more time to improve its internal standards, sources with knowledge of the matter said.
Under a deferred prosecution agreement it reached with U.S. authorities in 2012, the bank is due to remain under supervision by an independent monitor until the end of 2017. The sources said the bank now expects that date to be extended, possibly by several years.
The agreement has already been extended once, in 2014, and a decision on whether it will be extended again is expected by the end of this year, the sources said.
As part of the agreement with the U.S. Department of Justice (DoJ), StanChart established in 2013 a financial crime risk mitigation programme to improve its money laundering prevention and sanctions compliance worldwide.
Upgrading the bank's technology so that all of its systems meet tough U.S. standards, however, is proving a daunting task and it could face years more of investment, two of the sources said.
Standard Chartered, the DoJ and the New York County District Attorney's office involved in the settlement declined to comment.
StanChart rival HSBC also has a deferred prosecution agreement with the DoJ set to expire next year, after it reached a $1.92 billion (1.44 billion pounds) settlement in December 2012 on charges tied to money laundering.
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