Standard Chartered has come out strongly against the way it has been portrayed by US authorities accusing the London-listed bank of laundering billions for the regime in Iran.

The New York State Department of Financial Services said yesterday that the bank had "schemed with the government of Iran and hid from regulators roughly 60,000 secret transactions, involving at least $250 billion, and reaping SCB hundreds of millions of dollars in fees" for a period of 10 years.

"SCB's actions left the US financial system vulnerable to terrorists, weapons dealers, drug kingpins and corrupt regimes, and deprived law enforcement investigators of crucial information used to track all manner of criminal activity," the DFS said. "In short, SCB operated as a rogue institution."

The DFS has ordered the bank to appear before it on August 15, saying that its New York banking license is at stake.

Standard Chartered has come out defending itself, saying it "does not believe the order issued by the DFS presents a full and accurate picture of the facts."

"Obvious contempt" for US rules

The US regulator also said that the bank had showed "obvious contempt" for US banking regulations, quoting a group director as having said, regarding Americans: “Who are you to tell us, the rest of the world, that we're not going to deal with Iranians.”

By contrast, StanChart said it voluntarily approached all relevant US agencies in January 2010, including the DFS, and informed them that it had initiated a review of historical US dollar transactions and their compliance with US sanctions. "This review focused primarily on transactions relating to Iran in the period 2001-2007, and in particular, their compliance with the U-turn framework established by the US authorities to enable ongoing US dollar trade with Iran by other countries," the bank said.

StanChart said it was surprised to receive the order from the DFS given that it is engaged in ongoing discussions with the other US agencies, and that "resolution of such matters normally proceeds through a co-ordinated approach by such agencies."

Standard Chartered said in a statement it ceased all new business with Iranian customers in any currency over five years ago. Additionally, the group said it has made presentations to the DFS and other US agencies concerning the strength of its global sanctions compliance program during the period under review and through to the present day.

Furthermore, the group said the analysis it shared with all the US agencies demonstrates that throughout the period the bank "acted to comply, and overwhelmingly did comply, with US sanctions and the regulations relating to U-turn payments."

"As we have disclosed to the authorities, well over 99.9 per cent of the transactions relating to Iran complied with the U-turn regulations," the bank said. "The total value of transactions which did not follow the U-turn was under $14 million."