February 16, 2011Treasury asks banks to monitor Egypt transactions
WASHINGTON - The Treasury Department on Wednesday told American banks to closely monitor transactions related to ousted Egyptian officials for any possible signs that state assets were being misappropriated.
But the advisory by the Treasury's Financial Crimes Enforcement Network stopped short of freezing the assets of former Egyptian President Hosni Mubarak and other officials, as Switzerland has done.
The advisory said banks should apply enhanced scrutiny to private banking accounts involving "foreign political figures" and increased asset movements that may be related to Egypt's transition of power. It did not mention Mubarak nor any other officials by name.
It advised institutions to "monitor transactions that could potentially represent misappropriated or diverted state assets, proceeds of bribery or other illegal payments, or other public corruption proceeds."
Egypt on Monday asked the United States, Britain and France to freeze assets of former senior Egyptian officials who are suspected of sending billions of dollars of assets abroad.
However, senior administration officials in Washington and a foreign ministry spokesman in Paris said Mubarak was not part of that request.
Protesters have called for the cash to be clawed back to alleviate poverty in Egypt.
FREEZE OF ASSETS
Switzerland, the world's biggest offshore banking center, ordered a freeze of assets that may belong to Mubarak, shortly after he stepped down as president last Friday. Cairo also is seeking Switzerland's legal assistance in recovering assets of former officials.
The U.S. Treasury advisory does not go that far, and stops well short of putting Mubarak or other former Egyptian officials on its list of sanctioned individuals -- a list that includes certain leaders such as Zimbabwean President Robert Mugabe.
The Treasury sanctions list also includes drug traffickers, terrorist financiers and proliferators of weapons of mass destruction who are designated under presidential executive orders. In addition to freezing assets, these sanctions ban U.S. persons and firms from transactions.
A Treasury spokeswoman declined to elaborate on the advisory to U.S. financial institutions.
However, foreign banks, particularly those that do business in the United States, are likely to heed the call for increased scrutiny of Egyptian transactions as they tend to comply with U.S. guidance on financial crimes and sanctions.
The Treasury advisory said financial institutions are normally required to file a suspicious activity report if they have reason to suspect a transaction relating to senior foreign political figures involves funds from illicit activity, if the transaction appears to have no business or lawful purpose, or if it shows signs of money laundering or terrorist financing.
"Financial institutions should be aware of the possible impact that events in Egypt may have on patterns of financial activity when assessing risks related to particular customers and transactions," the advisory said. AP
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