BANK DROPS DIPLOMATIC CLIENTS FOLLOWING REVIEW A Leading bank in London has refused to bank with a dozen of foreign missions including Papua New Guinea following a review by the bank citing tax evasion and money laundering allegations. HSBC bank has dropped its diplomatic clients which, was announced on Sunday (August 4) sending diplomats across the capital scrambling to find a new place to put their money. For Papua New Guinea, the news came a day after the Investigation Task Force Sweep (ITFS) published a full report on corruption in the country and the levels of tax evasion and money laundering by Papua New Guineans in the country and abroad. Banks in Australia have refused to bank with certain individuals and business from PNG following similar reports and investigations carried out by ITFS. ITFS chairman Sam Koim said today (05-08-13) it was a pity PNG diplomatic mission in London was affected but the banks have been warned on money laundering schemes and they have taken such moves for their own corporate safety and integrity. “I am not surprised that the HSBC bank has taken this step. Money laundering, tax evasion and terrorism have become global issues recently and as anti-corruption agencies around the world are working together, so are the banks,” he said. In the ITFS reports released on Friday, Mr Koim stated that the financial institutions, particularly banks, have stepped up in their approach to detect suspicious transactions and furnishing reports to the relevant agencies, which agencies form part of ITFS. The banks have trained their officers to detect suspicious transactions pursuant to the demands of the Proceeds of Crime Act (POCA). He said the banks have also identified people they classify as “high risk customers” who habitually use their bank accounts to launder proceeds of crime. “Banks have an obligation under the POCA to prevent money laundering activities by their customers. The banks have enhanced their due diligence checks and where they identified high risk customers, they have closed those bank accounts using the banks own prerogative,’ he said. Bank to bank communications have taken another level high, both within country and their respective corresponding banks abroad. Certain bank accounts have been closed in Australia. Mr Koim said certain suspicious transactions were flagged by the banks and when confirmed to be fraudulent, funds were frozen by the banks. “For some known cases where ITFS was directly involved in confirming the veracity of those payments, at least a sum of K12million had been saved,’ he said. He said the incident in London with the PNG High Commission could be isolated but the banks have taken their stand. The Associated Press reported that the majority of missions are finding it very difficult for other banks to accept them. Bernard Silver an ex-honorary counsel who serves as president of the Consular Corps of London said he had been told by British officials that more than 40 different embassies, consulates and high commissions had been affected. Mr Silver declined to name any specific missions but the Mail on Sunday Newspaper said that the Papal Nunciature – the Vitican’s mission to London – was affected, as was the Papua New Guinea’s High Commission and the honorary consul from Benin.
Posted on: Thu, 08 Aug 2013 12:23:32 +0000
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