Tag: AML

StanChart does it again !

StanChart Bank has its cup of woes brimming. US regulators have fined it USD 300 mn on Anti-Money Laundering charges.
The bank has been fined several times in the past, the result being its stock declining 34% in 15 months.

Two years ago it paid USD 667 mn as fine for violating sanctions on Iran.

So lessons have remained lessons and have not been learnt.

Stanchart’s downward spiral has also affected the results of Temasek Holdings, the sovereign wealth fund of Singapore.
Temasek has 18% stake in Stanchart.

Shall I tell you a joke ? Fitch, one of the leading rating companies in the world, has given AA+ rating to StanChart indicating that it has a stable outlook.

The Bankster(s)

Dacoity can be condoned even if it is committed by seemingly regular guys. More so when a bank does it. That too an ethic-insisting western bank.

Well, here is the story in short.

French bank BNP Paribas illegally transferred money from Sudan and Cuba. ‘Illegally’ because the countries are in the ‘sanctioned’ list – the countries that should not be either a source or a target of fund transfer using a banking channel. More so, if an American bank is involved.

You might ask, ‘BNP is not an US Bank. So what is the fuss?’.

BNP used a US bank for this purpose without disclosing the source of money.The US bank was JPMorgan Chase, the US behemoth.

Here is what BNP did.

Some satellite banks got funds from Sudan and Cuba. These satellite banks – legitimate banks related to BNP in a circuitous manner – transferred funds to JPMC which in them transferred these to BNP believing these to be genuine transactions. But JPMC got light of this when it detected some Cuba related ‘talk’ from back-office records from the satellite banks. And that ended the relationship with BNP for supposedly ‘Cuban’ accounts.

But BNP still continued with Sudan funds and later that was also found out by JPMC.

How did JPMC come into the picture ? BNP’s criminal mind was again behind this. Prior to JPMC, it used its own branch in New York for these transactions. But when the US increased surveillance, it took an US bank for its illicit fund operations. And JPMC was brought in.

As all movies end, the bad guy, BNP, was found out and fined $ 9 BN.

$ 9 Bn is too huge by any standards. Whose money is it anyways ? Stupid tax payers will finance a bail-out in case there is a need.

Wait a minute. Was JPMC so naive ? Probably it wants the regulators to believe it was naive for it had also been fined  $88.3 Mn in 2011 for its own Cuba, Iran funds.

That completes the story. Two villains make the best friends.

But why are Cuba, Iran and Sudan, ‘sanctioned’? Often cited reasons are that they finance terrorism.

Is Saudi Arabia any nobler ? Who finances the ISIS in Iraq ? Why no sanctions on Saudi ?

I need to sell arms to both Saudi Arabia and Israel at the same time while getting dead-cheap oil from the former and finance for the arms from the latter.

It’s the economy, stupid.

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