Standard Chartered Bank has been fined US$18 million for violating the United States Department of the Treasury’s Office of Foreign Assets Control (OFAC)’s sanctions on Zimbabwe.
OFAC has said the punishment is for over 1 795 transactions worth close to US$77 million that were done by Standard Chartered Bank New York and Standard Chartered Bank Zimbabwe.
“Between May 2009 and July 2013, Standard Chartered Bank Zimbabwe processed transactions to or through the United States involving Zimbabwe-related Specially Designated Nationals (SDNs) or entities owned 50 per cent or more, individually or in the aggregate, by one or more Zimbabwe-related SDNs.
“These transactions constituted apparent violations of the Zimbabwe Sanctions Regulations (ZSR), 31 C.F.R. Part 541. Standard Chartered Bank will remit $18,016,283 to OFAC to settle civil liability relating to the apparent violations of the ZSR.
“[Standard Chartered and its Zimbabwe unit (SCBZ)] …appear to have had actual knowledge regarding customer relationships that SCBZ maintained with persons identified on the SDN List over a period of several years,” said OFAC.
Earlier this year the United States extended sanctions against Zimbabwe by another year, claiming that new government’s policies continue to pose an “unusual and extraordinary” threat to American foreign policy.
Zimbabwe’s sanctions are guided by the Zimbabwe Democracy and Economic Recovery Act of 2001 (ZIDERA).
A key provision of the Act reads:
“It is the sense of Congress that the Government of Zimbabwe and the Southern African Development Community (SADC) should enforce the SADC tribunal rulings from 2007 to 2010, including 18 disputes involving employment, commercial, and human rights cases surrounding dispossessed Zimbabwean commercial farmers and agricultural companies.
In response to non-compliance, under section (c) of the of ZIDERA, the United States Secretary of the Treasury is ordered to “instruct the United States executive director to each international financial institution to oppose and vote against any extension by the respective institution of any loan, credit, or guarantee to the Government of Zimbabwe; or any cancellation or reduction of indebtedness owed by the Government of Zimbabwe to the United States or any international financial institution.”
The US$18 million fine is part of a wider $639 million settlement between Standard Chartered and OFAC.
According to OFAC, the “global settlement” consists of a combined US$1,1 billion settlement with federal, state, local, and United Kingdom government partners.
Standard Chartered agreed to pay US$639 million for the Iran sanction violations, together with violations involving Cuba, Sudan, Burma, and Syria.
The United States, through OFAC, has over the years slapped companies with millions worth of fines for conducting business with or on behalf of sanctioned countries, firms or individuals.