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March 4, 2008

US Barclays in money laundering probe

by Gill Montia

Story link: US Barclays in money laundering probe

Barclays in being investigated by authorities in the US following allegation that the bank has been conducting business with foreign states suspected of sponsoring terrorism.

The US Department of Justice and the New York district attorney are scrutinising payments made in dollars through a New York branch of the bank.

They will seek to establish whether the payments have been made by individuals or companies based in countries that are on a US blacklist because of links with terrorist organisations. The states include Cuba, Iran, North Korea, Sudan and Syria.

Banks in the US are banned from carrying out transactions in dollars for clients based in certain countries, as a means of deterring funding directed to US based terrorists. The Bush administration is now urging Europe put similar restrictions in place.

Ellen Zimiles, chief executive of Daylight, which advises firms on compliance with America’s Office of Foreign Assets Control and other laws, says: “Non-US institutions which operate in the US have to make sure their people have proper training and understand what the issues are.”

Meanwhile, Barclays is carrying out an internal review and is optimistic that enquiries by the US authorities are unlikely to have “a material adverse effect” on its finances.

However, in 2005, ABN Amro was fined $80 million for transactions through its New York office that failed to comply with regulations aimed at preventing money laundering.

 

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