A UK bank transferred money that could have been linked to terrorist financing, according to leaked documents.
Standard Chartered Bank processed nearly $ 12 million (£ 9.4 million) in payments for the Jordanian Arab bank from 2014 to 2016.
In 2016, Standard Chartered filed a report alerting authorities to more than 900 transactions it suspected to have been for “illicit activities under the guise of charity.”
The report raised concerns about “possible terrorist financing”.
The payments were reviewed after an American jury in 2014 discovered that Arab Bank knowingly provided banking services to Palestinian militant group Hamas in the early 2000s.
The verdict was later overturned, but in 2015 the bank reached an agreement with 597 victims or relatives of victims of 22 Hamas attacks in Israel.
In response to the leaked documents, Arab Bank said it “abhors terrorism and neither supports nor encourages terrorist activity”.
Arab Bank said it was never informed by Standard Chartered that it had concerns about transactions processed for its clients.
Standard Chartered has said it takes its responsibility to fight financial crime very seriously.
The leaked documents – known as FinCEN files – were shared by BuzzFeed News with the International Consortium of Investigative Journalists (ICIJ) and BBC News Arabic.
What has Arab Bank been accused of doing?
Arab Bank is one of the largest Arab banking networks in the world, with 600 branches spread across five continents.
In 2015, he agreed to a settlement with the victims and relatives of Hamas attacks in Israel between 2001 and 2004.
The year before, a US civilian jury found that Arab Bank knowingly provided banking services to leaders of the Palestinian militant group Hamas and the charities it controlled. This verdict was later overturned because the judge gave the jury incorrect instructions.
The 10-year court case showed Hamas used the bank to transfer money and pay the families of suicide bombers in the early 2000s.
Gary Osen, an American lawyer who represented the victims in the American lawsuit, told the BBC: “A terrorist organization… cannot move the kind of money that an organization like Hamas needs to function. You need banking services just the widest, most convenient route. ”
Hamas is viewed as a terrorist group by the United States, Israel, the EU and several other nations because of its long history of attacks and its refusal to renounce violence.
In 2005, after an investigation by US regulators, Arab Bank was no longer authorized to process payments in US dollars. He was also fined $ 24 million for failing to adequately guard against money laundering and terrorist financing and for failing to properly report suspicious activity.
What do the documents show?
Banks around the world rely on major Western banks like Standard Chartered to help them transfer money in US dollars. The service is known as a correspondent bank.
FinCEN files show Standard Chartered opened an investigation into the U.S. dollar payments it processed for Arab Bank after the 2014 lawsuit.
In early 2016, Standard Chartered released a Suspicious Activity Report (SAR), which alerts authorities to potential cases of criminal activity, such as money laundering or terrorist financing.
The SAR highlighted more than 900 payments which Standard Chartered said could have been for “illicit activities under the guise of charity”.
The payments have been characterized as “charities”, “gifts”, “support” or “gifts”, but “a great majority” of them were made “by people who did not. could be verified in the public domain, ”according to Standard Chartered’s analysis.
Other payments triggered “terrorism” alerts. Some appeared to be aimed at “specially designated nationals” who were subject to US sanctions.
According to the SAR, the suspicious payments prompted the Standard Chartered New York branch to “ [exit] his relationship ”with Arab Bank in 2016.
What are the banks saying?
Arab Bank said, “In all the countries 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 violate terrorism laws. ”
He said many of the allegations “date back almost 20 years” and that the vast majority of the accounts involved had no known terrorist connection at the time.
Arab Bank added that it was never informed by Standard Chartered that it had concerns about the transactions it processed for Arab Bank clients. Although Standard Chartered stopped processing US dollar payments for Arab Bank, it continued to have a very good business relationship with Standard Chartered, he said.
Standard Chartered said it “initiated the account closure” with Arab Bank shortly after the 2014 court verdict, but that it was a process that took some time.
He also said that an SAR “is not an admission of fault on the part of the bank, nor conclusive evidence that wrongdoing has taken place.”
“Only the competent authorities are able to make this determination. “
She added that she took her “responsibility to fight financial crime very seriously” and that she had “invested substantially in compliance programs”.
It had “nearly 2,000 employees” monitoring suspicious transactions, who last year “monitored over 1.2 billion transactions for potential suspicious activity.”
The FinCen files are a leak of secret documents that reveal how the big banks authorized the transport of dirty money around the world. They also show how the UK is often the weakest link in the financial system and how London is overflowing with Russian liquidity.
The files were obtained by BuzzFeed News who shared them with the International Consortium of Investigative Journalists (ICIJ) and 400 journalists around the world. Panorama conducted research for the BBC.
FinCEN files: full coverage; follow the reaction on Twitter using #FinCENFiles; in the BBC News application, follow the tag “FinCEN files”
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