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Standard Chartered: UK bank accused of helping to fund terrorists

Standard Chartered has been accused of helping to fund terrorist organisations.

A recent revelation alleges that Standard Chartered, a prominent UK bank, engaged in transactions facilitating terrorism funding, despite previously escaping prosecution for money laundering.

According to court documents filed in New York, the bank conducted billions of dollars’ worth of transactions from 2008 to 2013, violating sanctions against Iran and aiding designated terror groups such as Hezbollah, Hamas, al-Qaeda, and the Taliban.

The BBC reported that an independent expert has identified $9.6bn of foreign exchange transactions with individuals and companies designated by the US government as funding “terror groups.”

Although Standard Chartered avoided prosecution in 2012 with the intervention of the UK government, as a BBC report says, new evidence suggests it moved funds through its New York branch for entities sanctioned by the US, including Iran’s Central Bank.

The bank, in a statement, said it disputes the whistleblowers’ claims, adding that their previous allegations had been “thoroughly discredited” by US authorities.

While the bank denies these claims, independent analysis contradicts official statements, revealing hidden transactions exceeding half a million.

These transactions allegedly involve not only Iranian banks and companies, but also Middle Eastern money exchanges linked to terrorist financing.

Shockingly, among these dealings were transactions for a Pakistani fertiliser company known for providing materials used in Taliban attacks against military personnel in Afghanistan.

Additionally, the bank purportedly facilitated transactions for a Gambian front company owned by a Hezbollah financier.

Standard Chartered faced public allegations of manipulating transaction data on Swift, a widely-used international payment system, to facilitate the movement of billions of dollars through its New York branch on behalf of sanctioned entities, such as the Central Bank of Iran.

However, in September 2012, George Osborne, the Chancellor in Lord Cameron’s government, reportedly intervened on behalf of the bank, according to a BBC reports.

Subsequently, three months later, the US Department of Justice opted not to pursue prosecution against the bank.

Notably, the foreign exchange transactions outlined in court filings had not yet been brought to light, and there is no implication that Mr Osborne or Lord Cameron were aware of these transactions at the time.

The bank admitted twice to breaching sanctions against Iran and other nations, initially in 2012 and later in 2019, resulting in fines exceeding $1.7 billion. However, it has not confessed to facilitating transactions for designated “terrorist” organisations.

These transactions remained concealed within confidential bank records, initially disclosed to US authorities in 2012 by two whistleblowers, including former Standard Chartered executive Julian Knight. Allegations surfaced that US government agencies made false declarations to a court to dismiss their whistleblower reward claim.

According to the BBC, in 2019, US authorities involved in the investigation of the bank successfully moved to dismiss the case. An FBI agent testified to the court that the evidence presented did not indicate any improper US dollar transactions by the bank post-2007. Authorities contended that the allegations made by whistleblowers did not uncover any new violations, leading the court to deem the case “meritless.”

Contrary to these assertions, independent analysis conducted by David Scantling, an expert with extensive experience in counter-terrorist financing, including at the US Department of Defense and in the private sector, presents a different narrative. In a recent court filing, Scantling revealed that the bank’s spreadsheets contained records of over half a million transactions between 2008 and 2013, concealed from immediate view but accessible through a simple analysis technique known to professionals in his field.

Scantling’s declaration further highlights numerous transactions by Standard Chartered Bank (SCB) involving Iranian banks, companies, and Middle Eastern money exchanges allegedly financing designated foreign terrorist organizations, according to the US government. He also alleges that SCB processed transactions for a bank acting as a front for the Central Bank of Iran, despite claims of ceasing Iranian operations in 2007.

These revelations coincide with a period during which SCB was reportedly borrowing an average of $2 billion daily from the Term Auction Facility, an emergency program established by the US government to bolster banks amid the 2007-2009 global financial crisis. Scantling’s analysis concludes that the newly extracted data directly contradicts the government’s assertions to the court, suggesting undisclosed violations of sanctions.

BBC reports reveal that Standard Chartered allegedly facilitated transactions involving a Pakistani fertilizer company, Fatima Fertilizer, known for supplying explosive materials used in Taliban roadside bombs that caused casualties among UK and US military personnel in Afghanistan.

Additionally, it is claimed that the bank, known as the shirt sponsor for Liverpool FC, facilitated 73 transactions for a Gambian front company owned by a prominent Hezbollah financier, Mohammad Ibrahim Bazzi.

Daniel Alter, a former general counsel at the New York Department of Financial Services, expressed shock at these disclosures, describing them as “exponentially worse” than what the bank admitted in 2012. He emphasised the alarming connection between Standard Chartered’s transactions and terrorist organisations such as Hamas, Hezbollah, al-Qaeda, and the Taliban, labelling it a regulatory nightmare.

Standard Chartered, headquartered in London, primarily serves clients in Africa, the Middle East, and Asia. The bank faced potential criminal prosecution for money laundering by the US Department of Justice, prompting then-Chancellor George Osborne’s secret intervention in September 2012.

Following this intervention, the bank was fined $300 million two months later but avoided prosecution through a deferred prosecution agreement (DPA), with no individual bank executive facing charges.

In the same month, whistleblower Julian Knight approached US authorities with evidence suggesting the bank’s misconduct extended beyond what was previously acknowledged and persisted after 2007. In 2019, Standard Chartered agreed to another DPA and was fined an additional $1.1 billion.

Both the FBI and the US Department of Justice declined to comment on these developments, and neither Lord Cameron nor Mr Osborne provided on-the-record comments.

Standard Chartered expressed confidence that the courts would reject the claims against it, citing previous determinations by US authorities. However, whistleblowers disputed this, accusing US authorities of falsely denying the evidence they provided, which they claim constitutes previously undisclosed and damning evidence.

Samuel Bolaji

Samuel Bolaji holds a Master of Letters in Publishing Studies from the University of Stirling, Scotland, United Kingdom, and a Bachelor of Arts in English from the University of Lagos, Nigeria. He is an experienced researcher, multimedia journalist, writer, and Editor. He is currently the Editor of Arbiterz.

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