Standard Chartered plc (SCBFF) shares fell to the lowest level in nearly two years Tuesday amid reports that the emerging markets-focused investment bank could face a fine as high as $1.5 billion for violating U.S. sanctions on Iran.

The London-listed lender had paid more than $667 million to U.S. and New York state regulators in 2012, and further $300 million penalty in 2014, for dealing with Iran prior to 2007 and failing to address weakness in its money-laundering oversight. The new fines, linked to alleged dealings with Iran after 2007 in violation of a deferred prosecution agreement U.S. Department of Justice and New York County District Attorney's Office, have been flagged by the bank in its last annual report as having the potential for "substantial monetary penalties" relating to "International Sanctions, Anti-Money Laundering and Anti-Bribery and Corruption."

"We continue to cooperate fully with the investigation regarding our historical sanctions compliance, and are engaged in ongoing discussions with the U.S. authorities," the bank said in a statement to multiple media organizations.

Standard Chartered shares were marked 3.85% lower by mid-morning in London and changing hands at 62.5 pence each, a move that extends their year-to-date decline past 23%. 

The potential fines, first reported by Bloomberg, come amid renewed concerns over the risk of dirty cash being laundered through European banks and the recent scandal surrounding Danish lender Danske Bank, where an investigation found that the "vast majority" of around $234 billion in examined client flows from the Baltic branch, which were mainly connected to clients in Russia and the former Soviet Union, were deemed suspicious.

Dankse is the latest in a string of European lenders implicated in money laundering allegations, with ING Groep NV (ING) of the Netherlands agreeing only last week to pay a €775 million ($900 million) fine after it admitted that "shortcomings ... resulted in clients having been able to use their bank accounts for money laundering practices for years." Deutsche Bank (DB - Get Report) , the biggest in Europe, paid a combined $700 million in penalties for allowing "fake trades" between clients that U.S. regulators said allowed $10 billion in Russian money to be laundered through London and New York.

The European Union is looking at ways it which is can crack down on the practice, including setting up a region-wide authority similar to the European Central Bank's remit to monitor financial stability risks, but the proposals aren't expected to gain traction until after next spring's European parliamentary elections.

ECB vice president Luis De Guindos told lawmakers Tuesday that "a higher level of harmonisation of the applicable rules in the form of a regulation should be considered" in order to address weakness in the monitoring of certain banks in the region.

What Are "Closed-End" Mutual Funds and How Do They Fit into Savvy Investors' Portfolios? Click here to register for a free online video in which TheStreet's retirement expert Robert Powell and an all-star panel run down all you need to know.