The SEC has added links on its website to the pertinent portion of every company filing that mentions business conducted with U.S. designated “State Sponsors of Terrorism.” The five winning countries are Cuba, Iran, North Korea, Sudan and Syria. The companies are mostly banks, financial services or natural resource companies, with a sprinkling of some consumer products companies and biotech.
The only recognizable outliers are Xerox (in the Sudan, as all good genocidal propaganda, or at least “missing” posters need mass production), the Four Seasons (in Syria, for power lunch) and Nokia is the mobile carrier of choice for terrorists (with business in Iran, Sudan and Syria).
Remarkably, there are five companies that mention business in North Korea: Biotech Holdings Ltd, China Yuchai International Ltd, Credit Suisse Group Ltd, HSBC Holdings PLC and Siemens Aktiengesellschaft (Gesundheit).
Here’s an excerpt from Credit Suisse’s 20-F:
As part of its continuing evaluation of risk, in the first quarter of 2006, the Group determined to limit the amount of business with counterparties in, or directly relating to, Cuba, Iran, Myanmar, North Korea, Sudan and Syria. The Group has decided that it will not enter into new relationships with clients from these countries and will end all existing relationships with corporate clients and most private banking clients in these countries. Some designated relationships with private banking clients in these countries will be maintained subject to restrictions, including the centralization of the private banking relationship within Credit Suisse in Switzerland.
Translation: No more Swiss bank accounts for new or up and coming terrorists, although the really rich established ones can stick around, and have free checking.
Here, a nugget from HSBC’s 20-F:
HSBC takes its obligations to prevent money laundering and terrorist financing very seriously. HSBC has policies, procedures and training intended to ensure that its employees know and understand HSBC’s criteria for when a client relationship or business should be evaluated as higher risk. As part of its continuing evaluation of risk, HSBC monitors activities relating to Cuba, Iran, Myanmar, North Korea, Sudan and Syria. HSBC’s business activities include correspondent banking services to banks located in some of these countries and private banking services for nationals of, and clients domiciled in, some of the above countries. The Group has a small representative office in Tehran, Iran.
Translation: If we see anything, we’ll call you (quick Zarqawi, the back door is this way). We monitor this stuff we swear (are we still liable if we don't know about our client's activities?).
Then there’s China Yuchai International’s 20-F, which, I’m paraphrasing, says that the SEC sent us a letter and…um…yeah…we’ll get right on that.
SEC Adds Software Tool for Investors Seeking Information on Companies’ Activities in Countries Known to Sponsor Terrorism [SEC]