Regulators in Europe and Asia are investigating Standard Chartered PLC (StanChart) over the role staff might have played in transferring US$1.4 billion of private bank client assets from Guernsey to Singapore before new tax transparency rules were introduced, people with knowledge of the probes said.
The bank conducted an inquiry and notified regulators after employees raised questions last year about the timing of the transactions and whether customers’ funds had been properly vetted, said the people, who declined to be identified because the details are private.
The assets — held in its Guernsey trust unit for mainly Indonesian clients, some of whom had links to the military — were moved in late 2015 before the Channel Island adopted the Common Reporting Standard, a global framework for the exchange of tax data, at the start of last year, the people said.
Standard Chartered shuttered its operations on the island last year.
The Monetary Authority of Singapore, the country’s central bank, and the Guernsey Financial Services Commission are investigating the chain of events, the people said.
The UK Financial Conduct Authority, Standard Chartered’s home regulator, is aware of the transfers, but is not currently reviewing them, one person familiar with the matter said.
A Standard Chartered spokesman declined to comment.
Dale Holmes, secretary of the Guernsey regulator who acts as a spokesman, along with the Monetary Authority of Singapore and UK Financial Conduct Authority also declined to comment.
Standard Chartered’s processes and the way the transfers were handled are being examined, but regulators have not suggested that bank employees colluded with clients to evade tax, the people said.
Chief executive officer Bill Winters has dealt with a near-constant stream of misconduct issues old and new in his two-year tenure, from violating US sanctions on Iran to accusations of bribery in Indonesia. The scandals have overshadowed his efforts to turn around the Asia-focused lender.
Last year, Winters introduced a tighter code of conduct, saying senior staff had been flouting ethics rules and saw themselves as “above the law.”
The bank remains under the scrutiny of an independent monitor until December next year as part of a deferred prosecution agreement with the US in 2012.
It has paid almost US$1 billion in settlements for engaging in deals with Iran and for failing to improve anti-money laundering systems. If the lender slips up significantly again, it could face further fines or even the loss of its US banking license.
The bank has made numerous attempts to improve its compliance controls, including forming a board-level financial crime risk committee in 2015 and hiring detectives from the FBI, Scotland Yard, Hong Kong police and the New Zealand intelligence agency for its internal investigations team, Bloomberg News reported last year.
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