Fraud probe causes French banks to refuse Israeli checks
French bank Societe Generale has informed Israeli financial institutions that it will not clear checks originating from the Jewish state. The decision is in response to a court case being prepared against the bank for alleged involvement in a plot to launder €70 million from Israel.
Seven other French banks have been accused of participating in the scheme. The institutions named are Bred and Societe Marseillaise de Credit, French subsidiaries of the American Express Bank, Britain's Barclays, Israel's Leumi bank, Lebanon's Saradar bank, and the National Bank of Pakistan.
The scheme dates back to 1997 when banks notified the police that merchants in Paris's Sentier district, home to many Jewish businesses, had been defrauding them. Stolen French checks were being transferred to Israel, where they were deposited into local banks and sent on to correspondent banks in France.
The banks were eventually blamed for the affair on the grounds that, by failing to verify the checks, they had perpetuated the crime, reported AP.
Several other French banks have followed Societe Generale in its decision to block Israeli checks and Israel is worried that all the banks in the country will adopt the policy, reported Globes. The move is likely to damage commercial relationships between Israeli and French companies.
Due to the concern that the state of Israel has become a base for widespread money laundering, the government established the Prohibition on Money Laundering Law in 2000. The law imposes identification, record retaining and reporting obligations on providers of financial services. Monetary sanctions are imposed for failure to comply with these criteria. — (menareport.com)
© 2003 Mena Report (www.menareport.com)