News Analysis |
Habib Bank Limited (HBL) has been issued a notice from US State Department of Financial Services in New York for failing to comply with US anti-money laundering regulations. HBL faces 53 charges for various “deficiencies” and “failures” regarding compliance with regulations.
ARY News Anchor Arshad Shareef revealed official records of dozens of deposits to Nawaz Sharif’s bank accounts in Pakistan from 2007 to 2017 which amounts to several million dollars
These include failure to scrutinize transactions of individuals sanctioned by the State Department; suspicious money transfers with unclear origins and beneficiaries; and links with Al-Rajhi bank which is associated with Al-Qaeda terror financing.
The State Department has imposed a fine of $630 million on HBL’s New York branch penalizing Pakistan’s largest bank for malpractice.
Nawaz Sharif’s involvement
Deposed Prime Minister Nawaz Sharif was the subject of yet another firestorm of controversy after TV anchor Arshad Shareef exposed Sharif’s part in the charges faced by HBL.
The State Department’s report, while listing HBL’s compliance lapses, mentioned the bank’s failure to report suspicious “politically exposed person activity” which did not undergo proper screening required by US law.
‘Politically exposed person’ is a term used to describe a public office holder who poses a high risk of involvement in corrupt practices. US financial law requires banks to keep detailed Know Your Customer (KYC) files in order to confirm the legitimacy of funds that are being transferred.
Panama JIT report specifically states the Al-Rajhi bank accounts of the Sharif family were used for money laundering.
Although the report does not specifically name Nawaz Sharif, ARY News Anchor Arshad Shareef revealed official records of dozens of deposits to Nawaz Sharif’s bank accounts in Pakistan from 2007 to 2017 which amounts to several million dollars. The money was transferred from Sharif accounts in Al-Rajhi Bank to HBL’s New York branch and then to Pakistan.
This practice is not suspicious in of its self, it is commonly referred to as correspondent banking and is used when transferring US dollars, however, HBL New York was bound by law to ascertain the origin and purpose of these funds which it failed to do so.
The report alleges that HBL had a “good-guy” list of clients whose transactions did not undergo the required scrutiny. Nawaz Sharif was purportedly one of these clients.
Many analysts have pointed to this recent revelation as an answer to the repeated question of “why was I removed?” that Nawaz and his supporters have been propagating.
The facts are: since 2014 Al-Rajhi bank transactions constituted 24% of all transactions from HBL New York branch; Nawaz Sharif has drawn more than $4 million from Al-Rajhi through HBL New York; the State department report mentions involvement of “politically exposed person”; and the Panama JIT report specifically states the Al-Rajhi bank accounts of the Sharif family were used for money laundering.
This leaves little doubt that Nawaz Sharif’s money laundering contributed to HBL’s current predicament.
The State Department’s report further solidifies the validity of charges against Nawaz Sharif and his family. Many analysts have pointed to this recent revelation as an answer to the repeated question of “why was I removed?” that Nawaz and his supporters have been propagating.
Nawaz departed for London today (Wednesday) for a 10-day visit to be with his ailing wife. Some suspect that Nawaz will most likely not return due to the NAB investigation against his family.
His daughter and perceived political heir, Maryam Nawaz, is busy running her mother’s election campaign for the NA-120 seat.