HBL Money Laundering

[fatman17]

Arshad Shareef.

August 30, 2017

News Analysis |

Habib Bank Limited (HBL) has been issued a notice from US State Department of Financial Services in New York for failing to comply with US anti-money laundering regulations. HBL faces 53 charges for various “deficiencies” and “failures” regarding compliance with regulations.

ARY News Anchor Arshad Shareef revealed official records of dozens of deposits to Nawaz Sharif’s bank accounts in Pakistan from 2007 to 2017 which amounts to several million dollars

These include failure to scrutinize transactions of individuals sanctioned by the State Department; suspicious money transfers with unclear origins and beneficiaries; and links with Al-Rajhi bank which is associated with Al-Qaeda terror financing.

Read More: PML-N’s protests on Nawaz disqualification: Any legal merit?

The State Department has imposed a fine of $630 million on HBL’s New York branch penalizing Pakistan’s largest bank for malpractice.

Nawaz Sharif’s involvement

Deposed Prime Minister Nawaz Sharif was the subject of yet another firestorm of controversy after TV anchor Arshad Shareef exposed Sharif’s part in the charges faced by HBL.

The State Department’s report, while listing HBL’s compliance lapses, mentioned the bank’s failure to report suspicious “politically exposed person activity” which did not undergo proper screening required by US law.

‘Politically exposed person’ is a term used to describe a public office holder who poses a high risk of involvement in corrupt practices. US financial law requires banks to keep detailed Know Your Customer (KYC) files in order to confirm the legitimacy of funds that are being transferred.

Panama JIT report specifically states the Al-Rajhi bank accounts of the Sharif family were used for money laundering.

Although the report does not specifically name Nawaz Sharif, ARY News Anchor Arshad Shareef revealed official records of dozens of deposits to Nawaz Sharif’s bank accounts in Pakistan from 2007 to 2017 which amounts to several million dollars. The money was transferred from Sharif accounts in Al-Rajhi Bank to HBL’s New York branch and then to Pakistan.

Read More: Is NAB really capable of initiating meaningful investigation against Nawaz?

This practice is not suspicious in of its self, it is commonly referred to as correspondent banking and is used when transferring US dollars, however, HBL New York was bound by law to ascertain the origin and purpose of these funds which it failed to do so.

The report alleges that HBL had a “good-guy” list of clients whose transactions did not undergo the required scrutiny. Nawaz Sharif was purportedly one of these clients.

Many analysts have pointed to this recent revelation as an answer to the repeated question of “why was I removed?” that Nawaz and his supporters have been propagating.

The facts are: since 2014 Al-Rajhi bank transactions constituted 24% of all transactions from HBL New York branch; Nawaz Sharif has drawn more than $4 million from Al-Rajhi through HBL New York; the State department report mentions involvement of “politically exposed person”; and the Panama JIT report specifically states the Al-Rajhi bank accounts of the Sharif family were used for money laundering.

Read More: Nawaz Sharif’s “Interesting questions” & their equally “Interesting answers”!

This leaves little doubt that Nawaz Sharif’s money laundering contributed to HBL’s current predicament.

Fallout

The State Department’s report further solidifies the validity of charges against Nawaz Sharif and his family. Many analysts have pointed to this recent revelation as an answer to the repeated question of “why was I removed?” that Nawaz and his supporters have been propagating.

Nawaz departed for London today (Wednesday) for a 10-day visit to be with his ailing wife. Some suspect that Nawaz will most likely not return due to the NAB investigation against his family.

His daughter and perceived political heir, Maryam Nawaz, is busy running her mother’s election campaign for the NA-120 seat.

 

[fatman17]

Interesting ! Nawaz in US Embassy London, wonder he'd be doing there? Debriefing CIA? @INFANTRY28 @defencepk @CommandEleven @ShahidaQureshi5

 

[Sinnerman108]

Interesting ! Nawaz in US Embassy London, wonder he'd be doing there? Debriefing CIA? @INFANTRY28 @defencepk @CommandEleven @ShahidaQureshi5

Nearly all political parties have their own banking relations now.
This is to ease money transactions post 9/11 scenario.

Wait till Faisal Bank, Silk Bank and Habib Metropolitan bank come to surface.

 

[Khafee]

@war&peace This is the appropriate thread.

Google Agha Khan Money Laundering and see what comes up. Charges settled, with branch closure as part of deal for US$225m. Details below:

U.S. watchdog may fine Habib Bank, Pakistan's biggest lender, up to $630 mln
https://www.cnbc.com/2017/08/28/reu...k-pakistans-biggest-lender-up-to-630-mln.html

http://www.akdn.org/press-release/habib-bank-akfed-pledges-strength-continuity-and-innovation
https://www.dawn.com/news/352230
https://www.dawn.com/news/131655

@MastanKhan @HRK @BATMAN Please note

 

[somebozo]

Agha Khan Money Laundering

Agha Khan, Memon and Shia business primarily run their business with hundi/hawala and tax evasion...it is common practice around Karachi and well know.

They have been in spot light for various reasons as these kind of activities always tend to link somewhere with crime.

Millions have been extorted from Karachi while thousands of stolen mobiles and motor cycles remain unaccounted for. This money has simply vanished somewhere.

However I will consider it an overstatement that someone can just move millions of dollars in cash across the border and deposit it into banks - without the AML taking notice. As banks tend to be very investigative on large cash deposits.

A more sophisticated and organised launderer will never do this. They will use several people in the disguise of religious travel - from poor countries while holding their families as hostage - and everyone deposits a small donation which can then we laundered legally via network of charities...

 

[cloud4000]

Slight clarification. There's no US State Department of Financial Services, but New York Department of Financial Services, a state agency, not federal.

 

[somebozo]

Slight clarification. There's no US State Department of Financial Services, but New York Department of Financial Services, a state agency, not federal.

So no more HBL in USA? the most prized branch of a Pakistani bank is no more...

 

[Khafee]

So no more HBL in USA? the most prized branch of a Pakistani bank is no more...

As part of the deal to cut the fine from $630m to $225m, they are shutting it down, see the letter to PSE by HBL I posted.

 

[AnnoyingOrange]

 

[H!TchHiker]

Stupid HBL, this was bound to happened in view of there relationship with AL-Rajhi Bank
Anyone with a little knowledge of treasury world would have never done this in US

 

[HAIDER]

Dawn recently publish another report..about HBL closing

Court decision clouds NBP’s plan to open China branch
Kalbe AliUpdated October 05, 2017



6

ISLAMABAD: The opening of a branch by National Bank of Pakistan (NBP) in China has run into snags due to a recent decision by the apex court, which requires one-time capital adjustment of Rs47.5 billion on the bank’s balance sheet.

NBP President Saeed Ahmad told the Senate Standing Committee on Finance on Wednesday that the bank is all set to open its branch in China next year after getting licences from the regulator concerned.

However, the bank will not be able to meet the criterion if Rs47.5bn is eroded from the balance sheet, Mr Ahmad said.

SBP blames relations with Saudi bank for closure of HBL branch in New York

The Supreme Court recently ruled in favour of NBP pensioners – a decision that will have serious financial implications for the bank.

“We have to achieve Rs200bn bank balance sheet to open the NBP branch in China,” he said. According to consolidated financial accounts of the bank, its net assets amounted to Rs180.1bn at the end of 2016.

“We have received approval from Beijing and it has been sent for processing to the head office,” he added.

He told the committee that the bank’s non-performing loans as a percentage of total advances are coming down while lending for agriculture has increased recently. But borrowing by the textile sector is stagnant, he said.

Meanwhile, the committee gave the Finance Division, Establishment Division, Law Division, Auditor General of Pakistan (AGP) and Controller General of Accounts (CGA) three months to finalise the terms of reference on the separation of account and audit group cadres.

The committee was informed that the New York branch of Habib Bank (HBL) faced money-laundering charges and a fine, leading to its closure, mainly because of its business with Al Rajhi Bank of Saudi Arabia.

“To a large extent, business with Saudi Arabia’s Al Rajhi Bank was responsible for the downgrading and closure of the HBL branch,” SBP official Rizwan Haider said.

The committee was informed that decision-makers at HBL’s New York branch should not be blamed as the Saudi bank’s sudden downgrade was the source of the problem.

The committee was informed that the HBL branch had been operating in New York since 1978. In 2006, New York State’s banking regulator sought the bank’s compliance with regard to anti-money laundering (AML), suspicious activity reporting, suspicious transactions monitoring etc.

The branch received the “satisfactory” rating until 2011. It was downgraded to “marginal” in 2014 and “below satisfactory” in 2015.

Al Rajhi Bank also had a good standing with the Saudi regulator and was a major bank for remittances to Pakistan.

“This was the consideration of the HBL New York team while executing business with Al Rajhi... the decision to allow dollar clearance through the HBL New York branch was taken following due diligence in 2014 after JP Morgan closed the door on Al Rajhi for being a high-risk transaction bank,” the SBP official told the committee.

The committee was informed that some transactions of the bank were also restricted and management was asked to address deficiencies in AML compliance and clearing limitations.

Published in Dawn, October 5th, 2017

 

[cloud4000]

Stupid HBL, this was bound to happened in view of there relationship with AL-Rajhi Bank
Anyone with a little knowledge of treasury world would have never done this in US

They were told by US to clean up their operations, put in better compliance system, but the bank ignored them. Don't know why they did so, perhaps thinking nothing would happen. Found out the hard way it was not so. Now no branch and paying a hefty fine.

 

[HAIDER]

They were told by US to clean up their operations, put in better compliance system, but the bank ignored them. Don't know why they did so, perhaps thinking nothing would happen. Found out the hard way it was not so. Now no branch and paying a hefty fine.

All leads to this matter ends up Nawaz Shareef "steal mill" money transactions. Or Bank staff took it easy. Even though AML training is even mandatory for lowest level of bank staff which deal with foreign accounts. In US when come to foreign transaction banks are " extremely strict " .

 

[!eon]

Looking at scale of looting from low to highest, I am amazed how this country has survived till now. It has more enemies within than outside.

@war&peace This is the appropriate thread.

Google Agha Khan Money Laundering and see what comes up. Charges settled, with branch closure as part of deal for US$225m. Details below:

U.S. watchdog may fine Habib Bank, Pakistan's biggest lender, up to $630 mln
https://www.cnbc.com/2017/08/28/reu...k-pakistans-biggest-lender-up-to-630-mln.html

View attachment 425859

http://www.akdn.org/press-release/habib-bank-akfed-pledges-strength-continuity-and-innovation
https://www.dawn.com/news/352230
https://www.dawn.com/news/131655

@MastanKhan @HRK @BATMAN Please note

 

[Khafee]

@MastanKhan often says: "the US gives advance warning." HBL was warned for 3 years prior to the $630m fine, and subsequent "DEAL."

Unfortunately be it HBL's money laundering activities, or NBP's $150m Bangladesh scandal, no accountability.