Habib Bank altered trade documents to facilitate explosives deals

The New York branch of Pakistan’s largest bank altered trade documents as it repeatedly failed to comply with US anti-money laundering rules.

Habib Bank (HBL) has now been fined US$225 million and ordered to close down its New York banking business.

Watch lists ignored

Regulators found that the bank allowed transactions by 154 entities and individuals on US terror watch lists, including a leader of a terror group and an international arms dealer.

In one instance the bank arranged a payment to a Chinese weapons manufacturer that was subject to US non-proliferation sanctions.

The investigation determined that the “originals of certain trade finance documents had been altered to conceal that the goods shipped were explosives.”

Operations close down

The New York state department of financial services had wanted to fine HBL up to US$630 million for grave failures in complying with anti-money laundering rules, but agreed to the lower figure of US$225 million on condition that the bank will close down its New York branch.

The investigation also found widespread misuse of the SWIFT payment messaging platform that prevented HBL from effectively screening these messages for suspicious or prohibited activity.

Karachi headquartered HBL is Pakistan’s largest bank with total revenues of US$1 billion in 2016 and US$24 billion in total assets.



Categories: Trade Based Financial crimes News

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