The agreement on account closures was one of the measures outlined in the announcement of a $300m fine imposed on the group for its continuing failure to comply with anti-money laundering measures.
The NYDFS has also forced the bank to suspend its dollar clearing for high-risk retail business clients at its Hong Kong subsidiary.
In a response from the UAE central bank, it stated that between 1,400 and 8,000 Standard Chartered accounts would be affected and that it had formed a team “to review the records of accounts of these companies and their owners, to identify the violation” as recorded in New York “on every one of them”.
According to various media reports the central bank also said Standard Chartered will be liable to legal action by the account owners "because of the material and moral damage which is falling on them" and that the UAE’s Consumer Protection Unit was willing to consider complaints from affected account holders.
The central bank further said that although Standard Chartered had not met US regulatory rules, its UAE branches had committed "no significant violations" of international money laundering rules, such as the standards of the Financial Action Task Force.
Standard Chartered’s compliance failures were first unveiled in August 2012, when the NYDFS’ independent monitor revealed that the bank had failed to detect a large number of potentially high-risk transactions worth $250bn, including money laundering on the behalf of Iran.
After issuing a $340m fine and instructing that the bank be monitored for two years, the regulator issued a statement describing it as a “rogue organisation” with an “evident zeal to make hundreds of millions of dollars at any cost”.
It also included an extract from one of the 30,000 documents reviewed, in which the bank’s group executive director was quoted as saying: “You f**king Americans. Who are you to tell us, the rest of the world, that we’re not going to deal with Iranians?”
As a further result of its failure to improve its anti-money laundering controls, the bank has been prohibited from accepting new dollar-clearing clients or accounts across its operations without prior regulatory approval.
Superintendent of Financial Services, Benjamin Lawsky, said: “If a bank fails to live up to its commitments, there should be consequences.
“That is particularly true in an area as serious as anti-money-laundering compliance, which is vital to helping prevent terrorism and vile human rights abuse.”
