Tuesday, March 7, 2023


The indictment of Mohammad Ibrahim Bazzi, a Lebanese former Honorary Consul, in Federal Court in New York (EDNY), reminds us that such quasi-diplomats are always to be considered by compliance as high risk for money laundering, as well as every other variety of financial crime. Bazzi, who was designated by OFAC a number of years ago, is alleged to be a terrorist financier for Hezbollah; he attempted to move $700,000 from the State of Michigan to Lebanon. Given the zero tolerance that US law enforcement observes for terrorist financiers, compliance officers would do well to regard all individuals who hold the position of Honorary Consul, which does not confer diplomatic status, but is in a grey area that allows them to game the system for criminals, as very high risk.

One recent investigative article, by ProPublica, estimates that there are more than 500 Honorary Consuls engaged in corruption or financial crime. They take advantage of their respected status in countries of the developing world to literally pull the wool over on local officials. Some are even successful in asserting diplomatic immunity from prosecution, although they do not hold such exalted positions in the law. Their position does seem to intimidate low-level government officials and law enforcement agents.

While many Honorary Consuls perform duties that aid foreign nationals abroad with distinction, the bad apples amongst them must cause compliance officers to regard all of them with suspicion, as part of any risk-based compliance program. Their position is not a true diplomatic office, although many execute functions which aid their nationals in important ways. Given the high percentage of offenders, compliance must, unfortunately, regard all as potential financial criminals, and closely monitor any bank accounts that they maintain. Keep a watchful eye on these people, please, lest you find out too late about the money laundering operation that they completed through your bank.

No comments:

Post a Comment

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