Tag Archives: laundering

Best. Quote. Ever.

13 Aug

Preparing for This Week in FCPA today, I came across this quote in the New York State Department of Financial Services’ Order against Standard Chartered:

You fucking Americans. Who are you to tell us, the rest of the world, that we’re not going to deal with Iranians.

This was from SBC’s Group Executive Director to its head of Compliance in New York.

In the anti-corruption space, we encounter this sentiment probably as often as the Sanctions compliance community does.

But it’s a legitimate question (if phrased, shall we say, indelicately?) Why is it okay for the US to export its foreign policy and mandate compliance by non-US institutions?

The DFS gives its answer a few paragraphs later:

In November 2008, the US Treasury Department revoked authorization for [a previously approved type of transaction] because it suspected Iran of using its banks—including [the banks Standard Chartered transacted with]—to finance its nuclear weapons and missile program. The US also suspected that Iran was using its banks to finance terror groups, including Hezb’Allah, Hamas, and the Palestinian Islamic Jihad, and engaging in deceptive conduct to hide its involvement in vairous other prohibited transactions, such as assisting OFAC-sanctioned weapons dealers. (emphasis mine)

It’s simple (at least to me). Because there’s no such thing anymore as “just in your country.” If what happens in your country stays in your country, you’re right, the US has no business getting involved (absent extraordinary circumstances like genocide etc.)

But honestly, the idea of an Iranian atomic weapon scares the crap out of me. If Iran is funding its program using money illicitly obtained at least partially through stripped wire transfers, whoever does that needs to stop.

Nor, I believe, is the problem exaggerated. When I was in the Bronx DA’s Office, one of the types of cases I was in charge of was video piracy. I’m talking about the counterfeit videotapes they sell on the street. The Bronx is, strangely enough, the counterfeit videotape capital of the United States, and tied for first (with Bangkok) in the World. It’s a big business, and part of what I tried to do was follow the money.

We found the money went to two different places. One was to Nigeria. The other was to Palestinian terror organizations.

So yes, I have no problem believing that Iranian nuclear ambitions are tied to stripped wire-transfer documents. There’s a reason that OFAC talks about the sanctions programs as implicating national security.

I conclude, therefore, that because the US is most certainly directly affected by Iran’s nuclear program, we do have standing to tell you that if you’re a US company, or your non-US company has US citizens in it, or is a subsidiary of a US company, then you can’t engage in certain types of financial transactions with people trying to blow up us and our allies. Sorry.