17 August 2005
United States Fines Arab Bank for Poor Money-Laundering Controls
$24 million penalty imposed on New York branch, Treasury Department says
The U.S. Treasury Department has fined a New York branch of a Middle Eastern bank for noncompliance with the U.S. law against money laundering.
In an August 17 statement, the department said it imposed a $24 million penalty on Arab Bank for its failure to conform to the Bank Secrecy Act, the most potent U.S. legal tool against money laundering and terrorist financing.
The act requires financial institutions to report suspicious transactions relevant to a possible violation of U.S. law or regulations and to monitor personal financial transactions for criminal, tax or regulatory irregularities.
Arab Bank, based in Jordan, has an extensive network of branches throughout the Middle East, Northern Africa, Europe and Asia.
Following is the text of the statement:
(begin text)
The Department of the Treasury
[Washington, D.C.]
August 17, 2005
Treasury Statement on Civil Penalty Imposed Against the New York Branch of Arab Bank, plc
"The U.S. Department of the Treasury's Financial Crimes Enforcement Network and the Office of the Comptroller of the Currency today imposed a $24 million civil penalty on the New York branch of Arab Bank, plc, for systemic Bank Secrecy Act failures.
"The Bank Secrecy Act requires financial institutions doing business in the Unites States to implement robust anti-money laundering systems and controls tailored to their operations and the risks associated with them. Such regimes are critical to protecting our financial system from the abuses of money laundering and terrorist financing.
"Financial institutions are critical partners in our efforts to ensure the integrity of the global financial system. Today's action reflects the Department of the Treasury's resolve to ensure that this partnership is effective."
(end text)
(Distributed by the Bureau of International Information Programs, U.S. Department of State. Web site: http://usinfo.state.gov)
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