Thursday, October 3, 2013


Buried in Middle East news this week is the story of the arrest of a West Bank Palestinian money launderer who made illicit payments to the families of Hamas operatives, some of whom were serving time in Israeli prisons. It is noteworthy that he reportedly used banks in China to transfer funds. Cash was deposited in the Bank of Palestine, and routed to the bank of China; ultimately, some of it ended up in Hamas hands in Gaza. Some funds went through Iran.

Money pipeline went through Bank of China

Add that to the lawsuit, reported here last year*, about the terrorist financing lawsuit filed in the United States, that alleges major Chinese banks are deeply involved in money laundering for Hamas. Regarding that case, it has been reported that the Government of China has brought pressure upon Israel not to cooperate. This is extremely disturbing, as it indicates that there is a factual basis for the suit, and that its disclosure will further erode the poor record of Chinese banks on AML/CFT issues.

How extensive is the role of Chinese banks in terrorist financing and money laundering for designated Middle East terrorist organizations, and should this not be grounds to raise Country Risk for China ?  Risk levels are already elevated, due to the generally uncontrolled activities of corrupt Chinese PEPs, who are able to move their ill-gotten gains overseas, into Western banks, with little interference from Chinese authorities. Adding terrorist financing threats to the equation only makes transactions with Chinese banks more high-risk.
*Hamas Victims sue Bank of China for Negligence and Breach of Statutory Duty

No comments:

Post a Comment

Note: Only a member of this blog may post a comment.