Standard Chartered Bank will pay $300 million to settle charges that it failed to remediate anti-money laundering compliance problems as required in the Bank’s 2012 settlement with the New York State Department of Financial Services (NYDFS).

Under the order, SCB will suspend dollar clearing through its New York Branch for high-risk retail business clients at its SCB Hong Kong subsidiary, exit high-risk client relationships within certain business lines at its branches in the United Arab Emirates, and not accept new dollar-clearing clients or accounts across its operations without prior approval from DFS.

“If a bank fails to live up to its commitments, there should be consequences,” said NYDFS director Benjamin Lawsky. “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 abuses.”

SCB’s compliance remediation failures were uncovered by an independent monitor — Ellen Zimiles of Navigant — which the Department appointed at Standard Chartered as part of the 2012 agreement.

Zimiles’ review of Standard Chartered’s transaction monitoring systems found that the Bank failed to detect a large number of potentially high-risk transactions for further review.

A significant amount of the potentially high-risk transactions the system has failed to detect originated from its Hong Kong subsidiary and SCB’s branches in the United Arab Emirates among others.

In connection with the implementation of its transaction monitoring system, SCB NY had created a rulebook with procedures to aid it in detecting high-risk transactions.

The SCB Monitor gathered information and attempted to test the SCB Rulebook.

After that review, the Zimiles determined that the SCB rulebook contained numerous errors and other problems, resulting in SCB’s failure to identify high-risk transactions for further review. SCB failed to detect these problems because of a lack of adequate testing both before and after implementation of the transaction monitoring system, and failed to adequately audit the transaction monitoring system.