FinCEN Files: UK bank may have moved money 'linked to terror activity

[MenInG]

A British bank moved money that may have been linked to terrorist financing, leaked documents show.

Standard Chartered Bank processed almost $12m (£9.4m) in payments for Jordan's Arab Bank from 2014 to 2016.

In 2016, Standard Chartered filed a report alerting authorities to more than 900 transactions that it suspected might have been for "illicit activities under the guise of charity".

The report raised concerns about "possible terrorist financing".

The payments were reviewed after a US jury in 2014 found Arab Bank had knowingly provided banking services to the Palestinian militant group Hamas in the early 2000s.

The verdict was later overturned, but in 2015 the bank reached a settlement with 597 victims or the relatives of victims of 22 Hamas attacks in Israel.

In response to the leaked documents, Arab Bank stated that it "abhors terrorism and does not support or encourage terrorist activities".

Arab Bank said it was never notified by Standard Chartered that it had any concerns over transactions processed for its customers.

Standard Chartered said it took its responsibility to fight financial crime extremely seriously.

The leaked documents - known as the FinCEN files - were shared by BuzzFeed News with the International Consortium of Investigative Journalists (ICIJ) and BBC News Arabic.

All you need to know about FinCEN documents leakYour guide to eight years of finance leaks

What was Arab Bank accused of doing?

Arab Bank is one of the world's largest Arab banking networks, with 600 branches spread across five continents.

In 2015 it agreed to a settlement with the victims and relatives of Hamas attacks carried out in Israel between 2001 and 2004.

IMAGE COPYRIGHTAFP

image captionArab Bank says it "does not support or encourage terrorist activities"

The previous year, a US civil jury found that Arab Bank had knowingly provided banking services to leaders of the Palestinian militant group Hamas and charities it controlled. This verdict was later overturned as the judge had incorrectly instructed the jury.

The 10-year legal case produced evidence that Hamas had used the bank to move money and pay the families of suicide bombers in the early 2000s.

Gary Osen, a US lawyer who represented the victims in the US lawsuit, told the BBC: "A terrorist organisation… can't move the kind of money that an organisation like Hamas needs to operate. You need banking services, and Arab Bank was simply the largest and most convenient route."

Hamas is regarded as a terrorist group by the US, Israel, the EU and several other nations due to its long record of attacks and its refusal to renounce violence.

In 2005, after an investigation by US regulators, Arab Bank was no longer authorised to process US dollar payments. It was also fined $24m for failing to adequately guard against money laundering and terrorist financing, and properly report suspicious activities.

What do the documents show?

Banks across the world rely on major Western banks like Standard Chartered to help them move money in US dollars. The service is known as correspondent banking.

The FinCEN files show that Standard Chartered began an investigation into US dollar payments that it had processed for Arab Bank after the start of the 2014 trial.

IMAGE COPYRIGHTREUTERS

image captionArab Bank was sued by American relatives of victims of attacks by Hamas

In early 2016, Standard Chartered issued a Suspicious Activity Report (SAR), which alerts authorities to potential instances of criminal activity, such as money laundering or terrorist financing.

The SAR highlighted more than 900 payments that Standard Chartered believed might have been for "illicit activities under the guise of charity".

The payments were labelled as "charities", "donations", "support" or "gifts", but "a large majority" of them were made "by individuals who could not be verified in the public domain", according to Standard Chartered's review.

Other payments triggered "terrorism" alerts. Some appeared to be intended for "Specially Designated Nationals" who were under US sanctions.

According to the SAR, the suspicious payments prompted Standard Chartered's New York branch to "[exit] its relationship" with Arab Bank in 2016.

What do the banks say?

Arab Bank said: "In every country where it operates, Arab Bank is in good standing with government regulators and complies with anti-terrorism and money laundering laws. No government or regulator has ever found that accounts or transactions processed by Arab Bank violated anti-terrorism laws."

It said many of the allegations "date back nearly 20 years", and that the vast majority of the accounts involved had no known terrorist links at the time.

Arab Bank added that it had never been notified by Standard Chartered that it had any concerns over transactions it processed for Arab Bank customers. Although Standard Chartered stopped processing US dollar payments for Arab Bank, it continued to maintain a very good business relationship with Standard Chartered, it said.

Standard Chartered said it "initiated account closure" with Arab Bank shortly after the 2014 court verdict but that it was a process that took some time.

It also said an SAR "is not an admission of fault on the part of the bank, nor is it conclusive evidence that wrongdoing has taken place".

"Only the proper authorities are in a position to make that determination."

It added that it took its "responsibility to fight financial crime extremely seriously" and that it had "invested substantially in compliance programmes".

It had "nearly 2,000 staff" monitoring suspicious transactions, who last year "monitored more than 1.2 billion transactions for potential suspicious activity".

The FinCen Files is a leak of secret documents which reveal how major banks have allowed dirty money to be moved around the world. They also show how the UK is often the weak link in the financial system and how London is awash with Russian cash.

The files were obtained by BuzzFeed News which shared them with the International Consortium of Investigative Journalists (ICIJ) and 400 journalists around the world. Panorama has led research

https://www.bbc.com/news/world-middle-east-54235202

 

[topspin]

The crime of financing Hamas is a drop in the ocean compared to Israel's occupation of Palestine.

However, notice the narrative of choice by the Zionist controlled media.

 

[MenInG]

ISLAMABAD: An explosive cache of secret documents relating to banking industry reveals how illicit money went unchecked at a global level with leading Western banks profiting while defying money laundering crackdown. These banks enabled smooth flow of questionable funds of individuals and organisations, some of them from Pakistan.

BuzzFeed News obtained records from a whistle-blower and shared them with the International Consortium of Investigative Journalists (ICIJ). The News was a partner from Pakistan, together with 108 media organisations from 88 countries. Named FinCEN Files, this collaborative project of investigative journalists is based on top secret bank reports filed to the US Treasury Department’s intelligence unit, the Financial Crime Enforcement Network.

The files, known as suspicious activity reports (SARs), show suspected illicit funds of more than $2 trillion moving through banking channels. The SARs are not less than transcripts of the failures of banks and other financial institutions and how this flourished the illicit money flow. Having been named in an SAR doesn’t mean proof of a crime; it warrants questioning about the source of funds which was not done. Once reported to the US Treasury, the files remain buried in the record.

According to BuzzFeed News, some of the leaked records were gathered as part of US Congressional committee investigations into Russian interference in the 2016 US presidential election while others were gathered following requests to FinCEN from law enforcement agencies.

BuzzFeed News has not commented on the identity of the source. Although, ICIJ has carried out ground-breaking investigations in the past like Offshore Leaks in 2013, Swiss Leaks in 2015, Panama Papers in 2016 and Paradise Papers in 2017, the FinCEN papers are different because they are not the documents of one or two companies. Instead, they have come from a number of banks. Majority of the SARs were generated by Standard Chartered Bank, Citibank, JP Morgan Chase, Bank of New York Mellon and Deutsche Bank.

The leaked documents are composed of more than 2,100 SARs naming individuals and organisations from different countries.

From Pakistan, Altaf Khanani’s global money laundering network formed part of SARs; a number of companies whose products were used in manufacturing Improvised Explosive Devices by Taliban also figured in connection with transferring and receiving huge sums of funds. Also named in the SARs are noted business individuals whose suspicious transactions had also raised alarms in Pakistan as well in the past.

Khanani laundered money at a global scale and his clients ranged from drug cartels to terrorist organisations. His worldwide network is estimated to have laundered between $14 billion to $16 billion dollars per year. Dubai-based Mazaka General Trading LLC was one of the companies he used for the purpose.

The same was used by US investigators for his conviction when they successfully infiltrated an undercover agent into his organization. Between December 2013 and February 2014, Mazaka received around $4.2 million through five transactions from two companies notorious for their role in money laundering from Russia — Seabon Limited and Griden Limited. It received another $720,000 from Hilux Services LP, a company which was at the center of a money laundering scandal in Azerbaijan. Mazaka also received $50 million from five companies in the Deutsche Bank mirror trades network between March 2013 and April 2014. There were also three transfers from a company in Singapore called Ask Trading Pte. to Mazaka.

Ask Trading had received almost $17 million from Cherryfield Management Ltd. which played a central role in the mirror trades.

A couple of other companies of Khanani network — Al Zarooni Exchange and Wadi Al Afrah Trading LLC — were used for multiple transactions through the Standard Chartered Bank. Likewise, Deutsche Bank was also used for a transfer of $184,000. Mazaka was used to trap Khanani when an infiltrator transferred ‘drug money’ of $1.15 million through Khanani’s couriers to an account which was in fact being operated by the US Drug Enforcement Agency. He was held at Panama airport where he was apparently invited to get a Panamanian passport. He thought he would meet drug lords there but found police waiting instead. He was handed over to the US where Khanani was sentenced to five and a half years in prison ending in July this year. His present whereabouts are unknown and his attorney didn’t answer questions sent by ICIJ and partner organizations.

The SARs indicate alarms were also raised about the transactions of a number of Pakistani companies. One fertilizer company, for example, received or sent over $3.8 million from its account to a number of unidentifiable businesses in China, Dubai and Pakistan. Three other Pakistani companies, according to the SARs, were also reportedly alleged for producing chemicals for suspicious activities. One of the companies processed over $1.2 million through S.C. Bank, including a payment to an unidentified entity in the UAE under the reference “purchase of seismic explosives.” One company had lost its business license in 2009 after it was found smuggling. One of the companies, it is learnt, later changed its business practices to make it difficult to abuse ammonium nitrate.

Other than organisations, some Pakistani individuals have also been named in different SARs. An owner of a food related chain and his sons received more than $850,000 from Dubai to Pakistan.

That transfer occurred in 2012. Incidentally, the Federal Board of Revenue’s Intelligence Unit was also alerted about extraordinary transfer of remittance into the accounts of this family whose entire business is in Pakistan but getting huge remittances from abroad. The amount then under question of FBR was around Rs4 billion. What was the conclusion of this inquiry remained unknown. Other than this family, a number of business individuals from different cities have been named in suspicious transactions.

Source GEO

 

[MenInG]

KARACHI: At least 44 Indian banks have been identified in connection with transactions by Indian entities and individuals in a set of Suspicious Activity Reports (SARs) filed by US banks with the watchdog, the Financial Crimes Enforcement Network (FinCEN), an investigation by The Indian Express has revealed.

According to a set of records of parties with Indian addresses, Indian banks figure in SARs linked to over 2,000 transactions valued at over $1 billion between 2011 and 2017. Significantly, there are thousands of transactions linked to Indian entities and businessmen where the Indian senders or beneficiaries have addresses in foreign jurisdictions.

Records investigated show that Indian banks mentioned in the SARs include: state-owned Punjab National Bank (290 transactions); State Bank of India (102); Bank of Baroda (93); Union Bank of India (99) and Canara Bank (190), among others.

Among private banks that figure in the SARs are HDFC Bank (253 transactions); ICICI Bank (57); Kotak Mahindra Bank (268); Axis Bank (41) and IndusInd Bank (117) among others.

Banks mentioned in the suspicious activity reports include state-owned Punjab National Bank, State Bank of India, Bank of Baroda, Union Bank of India and Canara Bank

According to the newspaper, the foreign banks that have filed the SARs include Deutsche Bank Trust Company Americas (DBTCA), BNY Mellon, Citibank, Standard Chartered and JP Morgan Chase among others.

Indian banks figure in the SARs primarily because they are “correspondent banks” to the foreign banks which have filed these SARs and figure in the network through which these transactions have been effected.

Records show there are cases where ‘suspicious transactions’ have been carried out through the international payment gateway of foreign banks, said the paper. In others, foreign branches of Indian banks such as a State Bank of India account in Canada and an account of Union Bank of India in the UK have been used by clients for carrying out part of the transactions in question.

Key to this is the correspondent banking relationship — an arrangement over which there has been growing concern as regulators crack down on secrecy of offshore transactions.

Under this arrangement, one bank (correspondent) holds deposits owned by other banks (respondents) and provides payment and other services to those respondent banks. Through correspondent banking relationships, banks can access financial services in different jurisdictions and provide cross-border payment services to their customers.

In the SARs, the foreign banks have cited a slew of reasons to red-flag these transactions, including “high-risk jurisdiction for money laundering or other financial crimes”, adverse media/public information on the client, “unidentified” parties, and the fact that “source of funds and purpose of transaction could not be ascertained”.

Meanwhile, there has been growing concern among banks over the idea of correspondent banking. According to a report on the issue by the Committee on Payments and Market Infrastructures (CPMI) of the Bank for International Settlements, prepared in 2016, banks providing these services are reducing their relationships.

The report says that rising costs and uncertainty about how far customer due diligence should be carried out in order to ensure regulatory compliance have been one of the key reasons for banks to cut back their correspondent relationships.

The report made several recommendations including standardisation of KYC norms and using legal entity identifiers in correspondent banking. It also recommended that global watchdogs like the Financial Action Task Force and anti-money laundering task force explore ways to tackle obstacles to information-sharing, with the aim of identifying potential best practices.

While mails sent to 10 banks for their comments on the SARs did not elicit any response, a spokesperson for the State Bank of India, in his response, said: “The information sought herewith is not available with the bank due to the SAR confidentiality regulations.

“The Financial Crimes Enforcement Network (FinCEN) has issued an advisory that any unauthorised disclosure of a SAR is a violation of US federal law… Both civil and criminal penalties may be imposed for SAR disclosure violations.

“This obligation applies not only to the SAR itself, but also to information that would reveal the existence (or non-existence) of the SAR. All the foreign branches of State Bank of India follow all the process as per the applicable local regulations to flag any suspicious transaction. SBI has been working with the highest level of compliance to legal and regulatory requirements not only in the India but also overseas.

“Bank at the same time follows a zero tolerance policy towards any violation of compliance.”

Published in Dawn, September 27th, 2020

 

[msaaim89]

[MENTION=142162]Napa[/MENTION] [MENTION=151350]Mesozoic[/MENTION]

Why am I not surprised, India funding terror activity and pretending to be an angel.
[MENTION=22846]Nostalgic[/MENTION] - FYI

 

[Napa]

[MENTION=142162]Napa[/MENTION] [MENTION=151350]Mesozoic[/MENTION]

Why am I not surprised, India funding terror activity and pretending to be an angel.

[MENTION=22846]Nostalgic[/MENTION] - FYI

You have no idea what a SAR means, it has no relation to "terror activity. Stop making these foolish posts.

No replies.

 

[msaaim89]

You have no idea what a SAR means, it has no relation to "terror activity. Stop making these foolish posts.

No replies.

It says in the first paragraph what an SAR is.

Obviously on that basis, the activity is not guarantee criminal unless checked in detail and proven.

No doubt however some of the transactions will be for all the wrong reasons. Wonder how K Yadhav received his money.

 

[cric_man]

It says in the first paragraph what an SAR is.

Obviously on that basis, the activity is not guarantee criminal unless checked in detail and proven.

No doubt however some of the transactions will be for all the wrong reasons. Wonder how K Yadhav received his money.

BLA has been designated as a terror organization. Pakistan should have insisted on US providing forensic trail of their financing. I bet you all roads will lead to rome... I mean South Block New Delhi.