BankingTimes reports - US authorities are investigating Barclays Bank.  The investigation centers around allegations that Barclays has been conducting business with countries suspected of sponsoring terrorism.

New York’s district attorney office in conjunction with the US Department of Justice  are investigating US dollar payments made through Barclays branch in New York.

The district attorney and Department of Justice are attempting to determine whether particular payments came from entities on the US blacklist.  Cuba, North Korea, Sudan, Iran, and Syria have been placed on the US blacklist for alleged links to terrorist organizations and in some cases, state sponsored terrorism.

Banks, even foreign banks, located in the US, are restricted from executing US dollar based transactions for clients on the US blacklist.  This restriction was put in place to help block direct sponsorship of US-based terrorists.  Washington DC is urging Europe put similar restrictions in place.

“Ellen Zimiles, chief executive of Daylight, which advises firms on compliance with America’s Office of Foreign Assets Control and other laws, says: ‘Non-US institutions which operate in the US have to make sure their people have proper training and understand what the issues are.’”

Barclays is conducting an internal review and is optimistic that the investigation by the US Department of Justice is not likely to have “a material adverse effect” on its finances.

“In 2005, ABN Amro was fined $80 million for transactions through its New York office that failed to comply with regulations aimed at preventing money laundering.”

This entry was posted on Thursday, March 13th, 2008 at 5:47 pm and is filed under money laundering. You can follow any responses to this entry through the RSS 2.0 feed. You can leave a response, or trackback from your own site.