- The Washington Times - Wednesday, August 17, 2005


Arab Bank PLC, one of the largest financial institutions in the Middle East, is paying a $24 million civil fine in connection with inadequate controls against money laundering at its New York branch, U.S. regulators announced yesterday.

The fine was levied by the Office of the U.S. Comptroller of the Currency and the Financial Crimes Enforcement Network, both Treasury Department agencies.

The comptroller’s office in February ordered the bank to stop transferring funds or opening new accounts at the New York branch, which was converted into an entity that does not conduct traditional banking activities but continues to engage in corporate and trade financing.

The agencies said yesterday that the $24 million fine was a follow-up action to the February consent order that Arab Bank signed with the comptroller’s office.

The fine, which the bank agreed to pay without admitting or denying wrongdoing, approaches the record $25 million civil levy imposed on Riggs Bank in mid-2004 for reported money-laundering violations.

“It is vitally important that banks have effective anti-money-laundering programs in place to ensure that the financial system is not used to facilitate terrorism or criminal activity,” Comptroller of the Currency John Dugan said.

“That doesn’t mean that banks should cease doing business with legitimate customers or file unnecessary suspicious-activity reports. It does mean that they must have a program in place that is sufficient to address the risk of their particular business activities.”

Arab Bank said it had cooperated fully with the regulators.

The Jordanian bank said it had been “diligently applying” money-laundering controls to the transactions made by customers of its Manhattan branch, but did not think the law required those controls to be applied to wire transfers to noncustomers for which the branch acted as an intermediary.

“We have agreed to the consent orders and to pay the fine in order to put this matter behind us,” said Shukry Bishara, the bank’s chief banking officer. “For years, Arab Bank has received very favorable reviews from its regulators throughout the world. bombers.”

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