Banking sector defends record on money laundering

Syria is taking steps towards developing an anti-money laundering regime in line with international standards, official banking sources in Damascus said. Banking officials have been highlighting their efforts to combat money laundering following a series of recent measures by the US Treasury against the Commercial Bank of Syria (CBS), which dominates the local banking sector. On 15 March, the US Treasury’s Financial Crimes Enforcement Network (FinCEN) published its final ruling against CBS, designating the bank a “primary money laundering concern”. FinCEN went on to say it would seek to prohibit US banks and other financial-service providers from maintaining correspondent accounts on behalf of CBS, which would give the Syrian bank access to the US banking system. The US has also recently banned CBS from dealing in US dollars, the first time the US takes such action against any bank in the world. The move was similar to a US proposal in May 2004 that aimed to cut CBS off from the US financial system. At the time, the US treasury accused the bank of being involved in the so-called oil-for-food scandal in Iraq and of possibly funding “terrorists”. CBS officials, meanwhile, deny any wrongdoing. On 7 May, CBS Director-General Dureid Dergham called the US accusations “unjustified”, adding that the bank was committed to performing at international financial standards. Dergham went on to explain that the bank had recently set up a monitoring committee, which will report directly to the Syrian Central Bank’s Anti-Money Laundering Commission. In addition, an officer has been assigned at each CBS branch to oversee operations and report misconduct. The CBS will also circulate lists of names of money-laundering suspects to all of its branches. According to Syrian Central Bank Governor Adib Mayaleh, the financial authorities “understood early…the importance of enhancing the role of the monetary system in combating money laundering and financing terrorism.” Mayaleh and Dergham were speaking at a three-day seminar organised in Damascus by the Arab Banks Union under the patronage of CBS, held to highlight steps taken by Syrian banks to combat money laundering and their commitment to international financial standards.