Saturday, February 9, 2019


What you are looking at is a display of weapons, allegedly part of an illegal arms shipment, Carried on a B767 freighter, which traveled from Miami to the city of Valencia in Venezuela. investigative reporters have linked two of the executives in the company to the American intelligence community, and have connected the dots, so to speak.

In light of the resumption of massive sanctions against Iran, when taken with existing US and European sanctions against Syria, Venezuela and a host of other countries, terrorist organizations, and non-state entities, compliance officers, who are operating a risk-based program designed to keep their banks' exposure to a minimum , must be alert to potential high-risk industries and enterprises.

If you are a student of history, you know that such names as Air America, Iran-Contra, BCCI, and World Finance Corporation (WFC) all are associated with operations conducted by the American intelligence community, without the knowledge and consent of US financial institutions whose facilities were used for purposes that violate the law, but due to national security considerations, were rarely, if ever, prosecuted. Our agents are protected, and for good reason.

 In a number of cases, our intelligence community has stepped in and quashed potential criminal prosecutions. This conduct is expected to continue, free of any US law enforcement interference or control, for what are considered valid national security considerations. Without passing judgment on these activities, they can and do expose unsuspecting US-based financial institutions, and their staff, to regulatory fines and penalties, and possible criminal prosecution.

We have provided a link to an Amnesty International white paper that lists aviation companies that are reportedly connected or linked to what are referred to specific Rendition flights, which were the covert transport of suspected Islamic terrorists to so-called overseas "black sites," after 9/11. Please find the link here.

We express no opinion as to whether any of the named companies are,  or are not, so-called "front companies," proprietary entities owned and controlled by the intelligence services; the identification of beneficial owners of these companies is generally impossible for compliance to ascertain, and it may actually be classified information that compliance officers do not have access to.

As the objectives of our intelligence services may at times clash with existing sanctions, resulting in increased risk for US financial institutions, non-bank financial institutions, and other companies providing financial services. Should an American bank provide cash, or financial services, to one or more of the listed companies, and it results in OFAC or other sanctions violations, there will potentially be exposure.

The prudent thing to do may be to have outside bank counsel prepare an affidavit, to be executed by any bank client, expressly stating that none of the bank's financial services will ever be used, directly or indirectly, to violate OFAC or other sanctions in effect, and any Federal or state law. This could be executed by any and all bank clients perceived to be even possibly at risk.

Additionally, any bank client deemed high risk should have not one, but two relationship managers assigned to the account. This measure is to insure that the chances that a single banker is not compromised, bribed, induced to engage in Willful Blindness, or blackmailed or extorted, in any way. This is not paranoia, simply a prudent and necessary measure.

Again, this is not ot pass judgment upon the activities of the aviation companies listed in the white paper, but simply to reduce risk to the lowest possible level, consistent with banking best practices, and the ability to serve your clients.

No comments:

Post a Comment

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