Posted on 09/04/2007 5:45:12 PM PDT by JasonC
We noted this past March that a lawsuit filed by former employees of Dutch bank ABN Amro publicly disclosed a common practice among European banks: instituting procedures to evade US restrictions on funding terrorist organizations and the states that love them. We didn't much like to hear that. Neither, apparently, did the US government.
"People close to several European banks say that US regulators and criminal investigators have broadened the scope of a probe that began with the Dutch bank.
"They are now examining whether a handful of banks similarly violated laws by processing US dollar payments through US counterparts for clients in Iran, Cuba, Libya and Sudan, countries that – with the exception of Libya after 2004 – are still subject to US sanctions programmes.
"Some legal experts say the case against ABN Amro, which promised in April to set aside hundreds of millions of euros to resolve a criminal investigation by the US justice department into its US dollar clearing practices, clarified for the first time the Bush administration’s position and interpretation of sanctions rules and their application to the financial services industry.
"Namely, that US banks and individuals are not allowed to facilitate banking activity abroad in which they could not engage directly.
“As a result, it is a wake-up call for the financial community with respect to the handling of wire transfers by foreign banks that ultimately touch on US-embargoed states,” says Wynn Segall, a partner at law firm Akin Gump in Washington."
I wonder whether the wake-up call will be enough. Maybe a loud pounding on the bedroom door, followed by kicking it in, then spraying the sleepy foreign bankers with semi-frozen yak spit, will be required. If so, I hope that I get to watch.
There has been the expected whining and sniveling from various quarters, along the lines of "everybody does it" and "but you let it go on for so long, you can't punish us now."
"Some people familiar with the investigations, who asked not to be named, say that the looming possibility of financial penalties raises questions about the authority of US regulators to penalise banks for conduct that went unchecked for years.
“This is an issue where the legal lines are not clear. It is the kind of thing that banks around the world engaged in."
That line of pathetic excuse-making never worked for me with my parents, and it won't work on Uncle Sammy.
"But if the ABN Amro case represents a model for the kinds of cases that US authorities may be bringing against other banks in the future, as some legal experts believe, then the US government would have a strong case to argue that the violations under scrutiny were not just routine technical blunders.
"In the case of the Dutch bank, regulators found that one of ABN Amro’s foreign branches was able to develop and implement “special procedures” for certain fund transfers and other operations “designed and used” to circumvent compliance systems established to comply with US laws.
"James Freis, director of the Financial Crimes Enforcement Network (FinCen), a division of the Treasury that investigates money laundering, said last month that “myths” about big penalties for minor lapses in banking requirements should be dispelled and that federal financial regulators were making “great efforts” to eliminate uncertainty about what they expect in a “solid, risk-based”, anti-money laundering programme.
As we understand it, as part of the stepped-up US enforcement effort, those foreign banks that violate US restrictions will henceforth find themselves facing "sanctions" imposed by one US "Treasury Agent" known as Jack Bauer. He hates foreigners, and he isn't real keen on bankers.
The story here is the routine evasion of US sanctions being practiced by European banks, on behalf of the worst terror-state clients, including Iran.
ABM Amro has reportedly set aside up to $500 million as a loss reserve against claims based on its non-compliance with with US reporting requirements related to sanctions.
The European governments are nowhere to be found. While they urge endless talk, their bankers not only routinely fund trade with Iran, they brazen break US laws government dollar transfers out of US banks, to facilitate it.
Secretary Paulson, please call your office, or something. Because this is ridiculous.
Sigh - some edits - one “with”, brazenly, governing
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