Author: Masood Haider
Publication: The Dawn
Date: December 10, 2001
All Pakistani banks operating in
the United States have been asked to stop day to day financial transactions
in accordance with new laws enacted by the United States following Sept
11 attacks which endeavour to stop flow of money to the terrorist organizations.
Besides Pakistan many banks of other
Muslim countries have been asked to suspend their daily cash transactions.
The orders came into effect as of Dec 1.
The banks are now allowed to issue
certified cheques, money orders or personal cheques only. All cash money
transactions are banned. Also include prohibiting transactions in foreign
exchange, transfers of credits to foreign banks and importing and exporting
currency or securities.
Pakistan's major banks - National
Bank, Habib Bank, United Bank, Habib Bank AG Zurich have received orders
from the US Federal Reserve Bank to stop cash transactions. National Bank
of Pakistan's major branch at one UN Plaza has stopped functioning and
has been merged with its Regional head office situated at Wall Street New
York.
According to the new law the US
Secretary of the Treasury Paul Neil now has sweeping powers to close the
door to the United States to foreign financial institutions and nations
that serve as conduits or depositories of terrorist funds or do not cut
off the money flow to terrorist groups.
In consultation with the State Department
and Justice Department, the Treasury Department is authorized "to employ
all powers granted to the President" under the International Emergency
Economic Powers Act (IEEPA). The powers include prohibiting transactions
in foreign exchange, transfers of credits to foreign banks and importing
and exporting currency or securities.
The New Law stipulates that US Treasury
department has existing power to require cash, suspicious activity reports
from aviation schools, crop dusters, many other high-risk businesses. Money
Laundering Alert provides specific actions that Congress and all US agencies
need to take to build permanent reforms to stop the financial nourishment
of terrorists. One of the primary actions needed is an overhaul of the
Treasury's Financial Crimes Enforcement Network.
The MLA provides key analysis of
the US money laundering law as it relates to terrorists. The law lists
176 "specified unlawful activities." Three of them deal with terrorism,
including one that deals with "providing material support to terrorists"
(Title 18, USC Sec. 2339A).
All Pakistani banks operating in
New York had signs posted outside the branches telling customers it could
no longer provide them any services.
Pakistani bank managers say that
it is not clear how long they would be able to function in the United States
if they are not allowed to open doors to general public. They have sought
intervention from the Pakistan government.