08 Sep 2017/Friday
banking regulators ordered Pakistan’s Habib Bank to shutter its New York office after nearly 40 years, for repeatedly failing to heed concerns over possible terrorist financing and money laundering, officials said on Thursday.
Habib, Pakistan’s largest private bank, neglected to watch for compliance problems and red flags on transactions that potentially could have promoted terrorism,
money laundering or other illicit ends, New York banking officials said.
The state’s Department of Financial Services, which
regulates foreign banks, also slapped a $225 million fine on the bank, although that is much smaller than the $629.6 million penalty initially proposed.
Habib has operated in the United States since 1978, and in 2006 was ordered to tighten its oversight of potentially illegal transactions but failed to comply.
New York regulators said Habib facilitated billions of dollars of transactions with Saudi private bank, Al Rajhi Bank, which reportedly has links to al Qaeda, and failed to do enough to ensure that the funds were not
laundered or used for terrorism.
Habib permitted at least 13,000 transactions that were not sufficiently screened to ensure they did
not involve sanctioned countries, the agency said.
And the bank improperly used a “good guy” list to rubber stamp at least
$250 million in transactions, including those by an identified terrorist and an international arms dealer, regulators said.