Banks in difficult position [Archives:2002/08/Business & Economy]

February 18 2002

By YT Staff
It’s no longer business-as-usual in banks around the world, as the United States has launched its war on terrorism.
Secret accounts that had been kept confidential prior to the Sept. 11, 2001 attacks against the U.S., are now being pried open. It’s believed such accounts worldwide account for as much as US $26 billion.
Yemeni banks are also being urged to change the way they do business. For their part, bank sources here say Yemeni banks don’t deal with large capital of the rich, but rather with only smaller personal balances.
International bankers are now required to inform officials about suspicious customers. At the same time they still need to be aware of laws that protect private bank information.
As a result, particularly if they deal with suspected terrorists, their reputations are on the line.
Bank sources say there are problems trying to balance customer rights with these new pressures. One recent list of 200 names of suspected terrorists that was sent to British Banks was given with just sketchy details.
Banks are also finding its difficult to be accurate with sensitive and personal information.
Different alphabets
Part of the challenge relates to differences in Latin and Arabic alphabets. Arabic names have been mixed at times, due to the similarity of some names.
The problem becomes more tangled when names are translated to French, English, Russian or German.
So banks in Yemen, as well as famous banks in the Gulf and throughout the world, have found themselves in difficult situations, as the Americans have requested accurate information about banking deposits.
The US administration has also issued new laws concerning tax evasion as a crime that may support terrorism.
As a result of these new policies, there has also been a huge movement of capital from European countries to the Gulf States. Some analysts warn that this may be dangerous.
It has not been uncommon for bankers in cities such as, London, New York and Geneva to ask about the resources of financing these transfers.
Observers wonder about the predominant wave of some banks targeting Arabic capitals.
It remains to be seen how much, if any, new Arabic capital Yemen could attract at a time when the US is still tracking terrorist funds.