In a revealing exposé, US court documents allege that Standard Chartered Bank (SCB), one of the UK’s largest financial institutions, facilitated billions of dollars in transactions for entities linked to terrorism. These transactions, allegedly conducted in violation of US sanctions against Iran, underscore the intricate financial networks that sustain global terror activities, with a significant focus on the Iranian regime’s involvement.
From 2008 to 2013, SCB is accused of conducting thousands of transactions amounting to over $100 billion, bypassing sanctions designed to curtail Iran’s economic activities due to its support for terrorist groups. An independent expert identified $9.6 billion in foreign exchange transactions with individuals and organizations designated by the US government as financiers of terrorism, including Hezbollah, Hamas, al-Qaeda, and the Taliban.
The allegations highlight that SCB manipulated transaction data on Swift, an international payment system, to obscure billions of dollars transferred through its New York branch on behalf of sanctioned Iranian entities, notably the Central Bank of Iran. These clandestine operations were supposedly shielded from prosecution when George Osborne, then Chancellor in Lord Cameron’s government, intervened on the bank’s behalf in September 2012. Following this intervention, the US Department of Justice decided against prosecuting SCB.
This intervention did not account for foreign exchange transactions that had yet to surface at the time. However, it was later revealed that SCB had breached sanctions against Iran and other countries on two occasions—first in 2012 and again in 2019—resulting in fines exceeding $1.7 billion. The bank has not admitted to conducting transactions specifically for terrorist organizations.
The depth of these transactions was uncovered through confidential bank spreadsheets, handed to US authorities by whistleblowers, including Julian Knight, a former SCB executive. These whistleblowers assert that US government agencies made false statements to dismiss their claims for a whistleblower reward. In 2019, a court dismissed the case, with an FBI agent asserting that there was no indication of improper US dollar transactions by the bank after 2007.
Contrary to these assertions, independent analysis by David Scantling, an expert with decades of experience in examining illicit bank transactions, revealed over half a million transactions between 2008 and 2013 that were “cloaked” in bank records. His declaration, filed in court, points to numerous transactions involving SCB with Iranian banks, companies, and Middle Eastern money exchanges that finance terrorist organizations according to US government designations.
One particularly egregious example is SCB processing transactions for a bank fronting for the Central Bank of Iran after claiming to have ceased Iranian operations in 2007. This occurred simultaneously as SCB borrowed an average of $2 billion daily from the US government’s Term Auction Facility, a program established to support banks during the global financial crisis of 2007-2009.
The newly extracted data starkly contradicts the US government’s representations to the court, suggesting significant undisclosed sanctions violations. Transactions included dealings with Fatima Fertiliser, a Pakistani company known for supplying explosive materials to the Taliban, and 73 transactions for a Gambian front company owned by Mohammad Ibrahim Bazzi, a key Hezbollah financier.
Daniel Alter, former general counsel at the New York Department of Financial Services, described the new disclosures as “shocking” and exponentially worse than what the bank admitted in 2012. He highlighted the frightening connections to terrorist organizations such as Hamas, Hezbollah, al-Qaeda, and the Taliban, which had not been disclosed previously.
SCB, headquartered in London, serves customers primarily in Africa, the Middle East, and Asia. When Osborne intervened, SCB faced potential criminal prosecution for money laundering by the US Department of Justice. In September 2012, Osborne communicated with top US financial officials, leading to a $300 million fine for SCB and a deferred prosecution agreement (DPA), a form of probation for corporations. No individual executives were prosecuted.
Despite the whistleblowers’ subsequent evidence of continued misconduct, SCB faced further penalties in 2019, agreeing to another DPA and paying $1.1 billion in fines for transactions between 2007 and 2011. Both the FBI and the US Department of Justice have declined to comment on the matter, while SCB remains confident that the courts will reject these claims, labeling the whistleblowers’ allegations as “meritless.”
The intricate web of financial deceptions orchestrated by the Iranian regime, facilitated by SCB, highlights the challenges in curbing the financial lifelines that sustain global terrorism.
