Banks Drive Terrorist Financing Underground

In a catch-22 that has real-life consequences, as outlined by The Wall Street Journal on Thursday (March 31), banks in the United States have closed accounts of people and enterprises — numbering in the thousands — considered suspicious.

Account owners range from foreign banks to nonprofits to money transfer firms, and the overarching theme has been that, even though accounts are being closed, frequently, these people of interest can’t be traced or monitored afterwards.

The publication cited examples that companies working with the government have been required to spot and report money laundering, among other malfeasances.

In the meantime, U.S. officials, said WSJ, never intended to close down broad swathes of accounts or truly force persons of interest off the financial grid. After 15 years of the Patriot Act, bank surveillance laws have been expanding for years, so much so that filings come in at about 55,000 daily.

One statistic: 200 million of the 220 million reports taken in over the past 15 years have been tied to financial reporting — transactions bigger than $10,000 must be reported. There’s lack of communication as banks do not get to know what happens in the wake of reports being filed.

In an interview with WSJ, Jonathan E. Lopez, who previously served as a money laundering prosecutor and is now in private practice, said: “If I’m a bank or a financial institution and I’m doing a risk analysis … I’d rather get rid of accounts that might cause [the government] to come to my door.”



B2B APIs aren’t just for large enterprises anymore — middle-market firms and SMBs now realize their potential for enabling low-cost access to real-time payments and account data. But those capabilities are only the tip of the API iceberg, says HSBC global head of liquidity and cash management Diane Reyes. In this month’s B2B API Tracker, Reyes explains how the next wave of banking APIs could fight payments fraud and proactively alert middle-market treasurers to investment opportunities.

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