AML and Pakistan compliance failures

Pakistan’s biggest lender, Habib Bank Ltd, faces compliance failures. Habib Bank is in trouble with the New York State Department of Financial Services (DFS). The DFS is the governing body that regulates financial services and products (including those subject to the New York insurance, banking and financial services laws). According to media reports, the DFS is seeking to impose a fine of up to $630 million for “grave” compliance failures. The accusation relates to anti-money laundering rules and sanctions at Habib Bank’s single U.S. branch.

A Reuter’s article from August 28 reports that such a penalty would be “the largest-ever faced by a Pakistani financial institution.” The DFS said in a filing that HBL’s compliance was “dangerously weak” and that “serious and persistent” failings found at its New York branch appeared to affect the entire Habib banking enterprise, posing “grave risks” to the banking system.

In response, HBL said that it would fight the DFS over the proposed fine.

Nausheen Ahmad, the bank’s company secretary, said in a statement on Monday that DFS did not recognise “the significant progress that HBL has made at its branch in New York” and that the bank would vigorously contest the proposed fine in U.S. courts.

Anti-money laundering (AML) efforts by the DFS and other regulatory bodies worldwide are serious business. Multinational organisations, and especially financial institutions, must employ the toughest AML compliance controls and standards to avoid the risk of even appearing to run afoul of AML laws.

That’s why CRI^® Group advises clients to have robust AML controls in place, especially when dealing in business overseas and entering into any new partnerships or mergers.

To have insufficient controls and be charged with engaging in money laundering can have any of the following negative consequences:

• Damaged corporate reputations and brand devaluation
• Eroding employee morale
• Potential consumer boycotts
• Negative investor perceptions
• Possible legal action
• Fines and potential jail terms for directors

CRI^® Group’s Investigative Due Diligence services provide the specialised intelligence needed by global financial institutions and multinational corporations to guarantee complete compliance with anti-money laundering (AML) regulations and legislation involving trans-national implications.

Contact CRI^® Group today and learn more about how your organisation can remain in full compliance with all applicable AML laws and regulations, giving you, your partners and your clients the confidence of knowing that the organisation, and its reputation, are protected from the negative consequences of money laundering.

Who is CRI^® Group?

Based in London, CRI^® Group works with companies across the Americas, Europe, Africa, Middle East and Asia-Pacific as a one-stop international Risk Management, Employee Background Screening, Business Intelligence, Due Diligence, Compliance Solutions and other professional Investigative Research solutions provider. We have the largest proprietary network of background-screening analysts and investigators across the Middle East and Asia. Our global presence ensures that no matter how international your operations are, we have the network needed to provide you with all you need, wherever you happen to be. CRI^® Group also holds B.S. 102000:2013 and B.S. 7858:2012 Certifications and is an HRO certified provider and partner with Oracle.