In Catalonia

Antoni Gaudi’s gothic vision for the Expiatory Temple of Sagrada Familia, Barcelona remains unrealised well over a hundred years after the foundation stone was laid in 1882. As a monumental work in progress it formed a fitting backdrop for discussions, both aspirational and practical, at Money Laundering Alert’s Second Annual European Money Laundering Conference. Timon Molloy files his first report.

“We don’t, I think, know much more now about the deadly subject of how terrorist financing works than we did on 10 September 2001,” Charles Intriago, founder of Money Laundering Alert, proposed in opening proceedings at the Spain conference. Over the same interval, which has witnessed attacks on Madrid and London, as well as the insurgency in Iraq and the recent Bali bombing the stakes for financial institutions found to have poor CTF (Counter Terrorist Financing) and AML (Anti-Money Laundering) compliance have certainly gone up dramatically. In August this year the New York branch of Arab Bank was ordered to pay a civil penalty of US$24 million for systems and controls deficiencies around detecting suspicious activity associated with transactions of originators and beneficiaries who were not its account-holders. The action followed a February order by the US Office of the Comptroller of Currency (OCC), which required the branch to convert to an agency office able to offer only limited banking facilities; it was also told to cease wire transfer operations. The case has been viewed nervously by financial institutions worldwide since it is the first time that a bank has been required, in effect, to know its customers’ customers. How far the principle will extend is open to debate. “As far as I understand, there’s no statutory or regulatory requirement in the US to do what Arab Bank has been required to do,” suggested Charles Intriago.“It’s a grey area,” said Douglas Greenburg, partner in the US law firm Latham & Watkins, “These issues were not adjudicated in the settlement.” “With all due respect to the US authorities, I wonder if the penalty would have been so high if it had been called the Thomas Jefferson Bank of Missouri,” commented Intriago. It’s not been all bad news for Arab Bank though – it was recently named Bank of the Year in Jordan by The Banker .