Arab Bank fined $24 mln over laundering controls

[seemslikeadream]

Wed Aug 17, 2005 1:56 PM ET


WASHINGTON/NEW YORK (Reuters) - U.S. banking regulators on Wednesday fined Palestinian-managed Arab Bank Group (ARBK.AM: Quote, Profile, Research) $24 million over its alleged failures to comply with U.S. anti-money laundering laws.

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"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 in a statement.

Arab Bank said regulators focused on the New York branch's role as an intermediary. It said it had been "diligently" applying anti-money laundering controls to transactions initiated by direct branch customers, but did not believe the law required the same controls to wire transfers where the bank acted as an intermediary.

Shukry Bishara, Arab Bank's chief banking officer, called the OCC's most recent examination of the bank a "great disappointment," reflecting "the difficulty many banks have in complying fully with (anti-money laundering) standards that are often confusing and constantly evolving."

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In January, Riggs Bank agreed to a $16 million criminal fine for not reporting suspicious transactions under the Bank Secrecy Act. It agreed to a $25 million civil fine with bank regulators in May 2004. PNC Financial Services Group Inc.(PNC.N: Quote, Profile, Research) acquired Riggs' parent, Riggs National Corp., in May 2005.

http://today.reuters.com/business/newsArticle.aspx?type=ousiv&storyID=2005-08-17T175532Z_01_N17244729_RTRIDST_0_BUSINESSPRO-FINANCIAL-ARABBANK-DC.XML