Jordan-based Arab Bank has been fined $24 million by US banking regulators for failing to implement anti-money laundering controls at its New York branch.
The Financial Crimes Enforcement Network (FinCen) and the Office of the Comptroller of the Currency have fined the bank for failing to comply with the Bank Secrecy Act. In a joint statement, the regulators say the bank's New York branch didn't adequately guard against the risks of money laundering and terrorist financing and also failed to report suspicious activities.
William Fox, director, FinCen, says the penalty confirms "the importance of establishing appropriate systems and controls to identify and timely report suspicious activity in connection with United States dollar clearing activities through correspondent banking relationships".
In a statement, Arab Bank says it "neither admits nor denies wrongdoing" but says it will pay the $24 million fine, which it described as "unreasonably high".
"We have agreed to the consent orders and to pay the fine in order to put this matter behind us," says Shukry Bishara, Arab Bank's chief banking officer. "Arab Bank abhors terrorism and we would never support terror financing in any way."
The bank claims it had been applying AML controls to the transactions initiated by the direct customers of its New York branch, but did not believe the law required these same controls to be applied to wire transfers in which the branch had only an intermediary role.