What did Standard Chartered do wrong?

Processed approximately $250 billion in Iranian wire transfers through US correspondent banks between 2001-2007. Stripped Iranian originator information from SWIFT messages to evade sanctions detection.

How much did Standard Chartered pay?

$340M to NYDFS in 2012, plus $1.1 billion to OFAC/DOJ/FinCEN in 2019 for broader Iran sanctions violations.

What is wire stripping?

Removing or altering originator/beneficiary information from SWIFT messages to obscure the sanctioned party's involvement. It is a direct sanctions violation.

What is the correspondent banking lesson?

Screen transactions at the transaction level, not just at the respondent bank level. Wire data integrity is non-negotiable.

Standard Chartered OFAC case study

Standard Chartered Bank faced multiple OFAC enforcement actions for Iran-related sanctions violations, including a 2012 settlement and a 2019 settlement totaling over $1.1 billion.

Background

Standard Chartered, a UK-based bank with extensive Middle East operations, processed thousands of wire transfers for Iranian banks through its US correspondent banking relationships. The bank stripped Iranian originator information from SWIFT messages to evade US sanctions detection.

What happened (U-turn violations)

Between 2001 and 2007, Standard Chartered processed approximately $250 billion in Iranian wire transfers through US banks. The bank removed or altered originator information to obscure the Iranian connection, deliberately bypassing US sanctions on Iran.

Penalties

Lessons for correspondent banking

Year	Amount	Agency	Issue
2012	$340M	NYDFS	Iran wire stripping
2019	$1.1B	OFAC + DOJ + FinCEN	Broad Iran sanctions violations

1. Wire data integrity is critical. Stripping or altering originator information is a direct sanctions violation. 2. Correspondent banking requires transaction-level screening. Screening only the respondent bank is insufficient. 3. Culture matters. Standard Chartered's compliance team flagged the issue but was overruled by business interests.

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Frequently Asked Questions

What did Standard Chartered do wrong?: Processed approximately $250 billion in Iranian wire transfers through US correspondent banks between 2001-2007. Stripped Iranian originator information from SWIFT messages to evade sanctions detection.
How much did Standard Chartered pay?: $340M to NYDFS in 2012, plus $1.1 billion to OFAC/DOJ/FinCEN in 2019 for broader Iran sanctions violations.
What is wire stripping?: Removing or altering originator/beneficiary information from SWIFT messages to obscure the sanctioned party's involvement. It is a direct sanctions violation.
What is the correspondent banking lesson?: Screen transactions at the transaction level, not just at the respondent bank level. Wire data integrity is non-negotiable.