Bank Of America
January 14, 2011 by staff
The permanent members of the Security Council of the UN, as France and China are among the many countries told to find a new bank JPMorgan Chase said after the diplomatic missions in Washington and New York to close their accounts in March 31.
Patrick Kennedy, undersecretary of state, met with representatives from over 150 countries at UN headquarters to address concerns about the accounts.
He told reporters after the Secretary of State Hillary Clinton and Treasury Secretary Timothy Geithner have been involved in efforts to persuade banks to reconsider their decision and for other banks in diplomatic affairs.
U.S. officials have insisted that the banks had taken a “business decision.”
The major powers say they expect to quickly find an alternative bank, but dozens of poor countries, especially from Africa are already experiencing problems, diplomats said. The accounts are required to pay staff salaries and bills mission.
With very little income coming from within America, the bulk of the security Council members are having to put millions of dollars a year for their missions.
JPMorgan Chase, which has a heavy diplomatic clientele, as she had a branch at the UN headquarters in New York is the only bank known to have closed all accounts embassy.
But Bank of America last year cut five accounts held by the Embassy of Angola and several other banks said they expect the U.S. authorities to break the diplomatic business, reports the Washington Post.
No U.S. bank has not yet spoken publicly about the decision, but diplomats say they believe that because of the high cost of monitoring the money arriving in the U.S. for signs of criminal activities of terrorists or others.
Robert Rowe, vice president of the American Bankers Association, the main group representing U.S. banks, has blamed the increasing pressure from regulators to crack down on corruption and other criminal activities.
“Because of the requirements of (government) examiners banks are particularly cautious” on money from abroad, Rowe told AFP. “Especially when it comes to missions abroad” by “High Profile” individuals.
“There are a lot of scrutiny now,” he said. “It becomes very difficult for banks to tell the good from the bad guys.”
Rowe said in other countries facing similar problems of accounting for foreign capital flows.
The United States has strict laws against t*rror*sm and the financing of crime. But Paris-based Financial Action Task Force, an intergovernmental body, has spread stricter measures in many countries.
JPMorgan Chase sent a letter to ambassadors of the United States on Sept. 30 warning that all diplomatic accounts and credit cards would be closed from March 31.
The U.S. government said the ambassadors couldn’t force banks to accept diplomatic affairs and the U.S. Mission to the United Nations embassies warned they may have difficulty finding another school.
Copyright © 2011 AFP. All rights reserved.
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