StanChart liable to legal action: UAE Central Bank

Banking group Standard Chartered is liable to legal action in the UAE after it agreed to close some customers' UAE accounts in an anti-money laundering settlement with US regulators, the UAE Central Bank said on Thursday.

Under the settlement, announced on Tuesday, the bank agreed to pay a $300 million fine, end high-risk relationships with small- and medium-sized business clients in the UAE, and suspend the processing of dollar-denominated payments for some clients at its Hong Kong unit.

In the UAE, between 1,400 and 8,000 Standard Chartered accounts are expected to be affected, the central bank said, adding that it would examine every account to identify any violations.

The British-based bank will be liable to legal action by the account owners "because of the material and moral damage which is falling on them", the central bank said.

It added that its Consumer Protection Unit was willing to consider complaints from affected account holders.

However, the central bank said that while Standard Chartered had not fulfilled US regulatory requirements, its UAE branches had committed "no significant violations" of international money laundering rules, such as the standards of the Financial Action Task Force, an inter-governmental body.

Standard Chartered said on Tuesday, after the settlement was announced, that it was in any case seeking to leave the business of serving small- and medium-sized clients in the UAE as part of a broad effort to sharpen its strategic focus.

"The UAE remains one of Standard Chartered's leading franchises globally and the move does not reflect a decreased focus on the country," the bank said in a statement.

Standard Chartered on Thursday said in London that it would work with regulators after the UAE Central Bank warned it could face legal action after agreeing to close some customers' UAE accounts in an anti-money laundering settlement.

"We have noted the announcement made by the UAE Central Bank. We always work with our regulators to achieve the right outcomes," the bank said in a statement.

 

Follow Emirates 24|7 on Google News.