US court papers have alleged that Standard Chartered, the UK-based bank, conducted billions of dollars worth of transactions with funders of terrorist groups. The documents, filed in a New York court, claim that thousands of transactions, worth more than $100bn, were carried out between 2008 and 2013 in violation of sanctions against Iran. An independent expert said $9.6bn of foreign exchange transactions with companies and individuals financing groups including Hamas, Hezbollah, al-Qaeda and the Taliban were identified in the filings. The bank denies the claims.
Standard Chartered was accused of falsifying transaction data on the Swift international payment system to transfer billions of dollars via its New York branch. The bank avoided prosecution by the US Department of Justice after intervention by the UK government in 2012. In separate cases in 2012 and 2019, the bank paid fines of $1.7bn for breaching sanctions against Iran, but has not admitted processing transactions for terrorist organisations.
Confidential Standard Chartered spreadsheets apparently contain records of over $100bn of transactions alleged to be in breach of sanctions against Iran and to involve financing for terrorists. They were first given to US authorities by two whistleblowers in 2012. An expert with decades of experience examining illicit bank transactions for the CIA, David Scantling, stated that records of over half a million transactions had been “cloaked” in the documents but could still be extracted.
The filings include claims that Standard Chartered facilitated 73 transactions on behalf of a Gambian firm owned by Hezbollah financier Mohammad Ibrahim Bazzi. They also assert that the bank processed transactions for Fatima Fertiliser, a Pakistani company which sold explosive materials used by the Taliban in roadside bombs in Afghanistan.
The UK government intervened on behalf of Standard Chartered in 2012 when the bank was risking criminal prosecution for money laundering by the US Department of Justice. Then chancellor George Osborne wrote to US Federal Reserve chair Ben Bernanke and US Treasury Secretary Tim Geithner after which the bank was fined $300m but received only a deferred prosecution agreement
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