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Banking & Finance news

FNB to close OFAC-listed accounts

22 Jan 2013 13:41
First National Bank will terminate its relationship with any entities on the United States Treasury's list of organisations targeted for economic and trade sanctions‚ it said on Monday, 21 January 2013.
This was in response to question relating to its plan to close the account of the pro-Palestine Al Aqsa Foundation of SA (Aafsa)‚ which said it supported more than 1000 orphans in South Africa every month.

"FNB would have and will take the same decision with regards to any [Office of Foreign Assets Control] OFAC listed entity‚" said FNB commercial banking CEO Michael Vacy-Lyle.

The issue arose when Aafsa questioned the banking group's plan to close its account on March 31 this year because it was on the list.

According to Aafsa's website‚ the list enforces "economic and trade sanctions based on US foreign policy and national security goals against targeted foreign countries and regimes‚ terrorists‚ international narcotics traffickers‚ those engaged in activities related to the proliferation of weapons of mass destruction‚ and other threats to the national security‚ foreign policy or economy of the United States".

Aafsa said that in the course of trying to resolve the issue‚ the bank had told it it had done nothing wrong.

Aafsa said it was a legal‚ non-profit organisation registered with the social development department and was compliant with the SA Reserve Bank.

It said FNB claimed it was not compelled to subscribe to global networks which refused to trade with organisations on the list.

"However‚ they asserted their choice to close Aafsa's account was based on possible financial losses and international isolation from these networks should they continue their relationship with the Aafsa‚" the organisation said.

Aafsa said it had shown the banking group that its name and that on the OFAC list were not the same. The bank had said it should get legal advice on the assertion of mistaken identity.

It said FNB had said it would change its decision if a case of mistaken identity was proved. It agreed to approach the SA Banking Council about this‚ because the situation might arise again with other organisations‚ and it needed to know how to deal with the matter.

"Despite the agreement to further investigate the matter‚ the bank has refused to extend its 31 March deadline for the permanent closure of the Al Aqsa Foundation of South Africa's account‚" it said.

Aafsa had limited transactions‚ with no withdrawal facility and believed no other bank would open an account for it in South Africa.

"This will force a reputable‚ decade-old organisation that supports 1500 orphans every month to shut its doors‚ thus terminating the only lifeline these children have‚" it said.

Vacy-Lyle confirmed the decision to close the account.

"It has come to the bank's attention that the foundation is expressly listed by the US Department of Treasury‚ [OFAC] and other international sanctions lists. The listing of the foundation has been verified with reference‚ inter alia‚ to the addresses contained in the listings documents.

"The international financial community impose stringent obligations in respect of the maintenance of banking relationships with entities listed by OFAC‚ and the decision by FNB to terminate its relationship with the foundation is a consequence of this fact alone‚" he said.

The account would be closed with reasonable notice.

On its website‚ Aafsa describes itself as "providing for the religious‚ cultural and social needs of the poor and needy Palestinians living within the West Bank‚ Gaza‚ Lebanon and Jordan".

Source: Sapa


SOURCE

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