If Pakistan’s Largest Bank Wants To Launder Money, It’ll Have To Do So In The Bahamas Or Delaware

New York will not help finance terrorist attacks against itself for more than a couple of years without doing something about it.
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Appropriate money-laundering site. Saif Gill [CC BY 3.0], via Wikimedia Commons

Appropriate money-laundering site. Saif Gill [CC BY 3.0], via Wikimedia Commons

If there’s anyplace on earth to which you don’t want to see illicit money transfers right now, it’s North Korea. But Pakistan wouldn’t be far behind. Alas, that country’s largest bank apparently couldn’t help itself, so now it has to pay $225 million and go home.

“DFS will not tolerate inadequate risk and compliance functions that open the door to the financing of terrorist activities that pose a grave threat to the people of this state and the financial system as a whole. The bank has repeatedly been given more than sufficient opportunity to correct its glaring deficiencies, yet it has failed to do so,” said Maria Vullo, superintendent of NYDFS, in a statement….

NYDFS said Thursday that the bank’s New York branch has failed to comply with a 2006 agreement with the agency’s predecessor to improve its anti-money-laundering and counter-terrorism-finance compliance. Violations of the 2006 agreement and state banking law have occurred almost every year since it was struck, NYDFS said.

Harsh words, but Habib seems pretty pleased to be getting off and getting out so easily.

“HBL is pleased to have this matter behind it and has begun the orderly wind-down of its New York operations,” Matthew Biben, a partner at Debevoise & Plimpton LLP and the bank’s U.S. lawyer, said in a statement….

Pakistani brokerage firm Intermarket Securities said the hefty fine would hurt profits and could force HBL to issue foreign-currency subordinated debt to pay the regulator.

But the sum was “manageable” and the medium-term outlook for the bank should not be affected, it said in a research note.

New York Regulator Fines Pakistan’s Largest Bank $225 Million [WSJ]
Pakistan’s Habib Bank to pay $225 million New York fine for compliance failures [Reuters]

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