Dr. Joseph Torbey

Excellencies, Ladies and Gentlemen,

On behalf of the Union of Arab Banks, I would like to thank our organizing partners, and the supporters of this initiative, the Private Sector Dialogue (PSD), particularly the Federal Reserve Bank of New York that is hosting our gathering today.

Ladies and Gentlemen, Like every year, we – bankers and regulators from the United States and from the Arab region – meet again, to shed light and discuss the global developments in compliance, and in preventing money laundering and terrorism financing, in addition to other related issues that represent concerns for US and Arab banks and their regulators.

We believe that this initiative materializes the persistence of the Arab banking community to continuously address and discuss money laundering and terrorism financing concerns with the US authorities and banks, in order to preserve our strong ties with the US and global banking markets, mainly through correspondent banking relationships.

We also believe that maintaining strong ties with the global markets requires that the Arab banking sectors play a crucial role in the global battle against money laundering and terrorism financing. We also believe that Arab banks are indeed the gatekeepers and bear responsibility in preventing illegal flows of funds, within or outside their networks.

Ladies and Gentlemen, Combating money laundering and terrorism financing and compliance in its broad meaning is becoming a harder task, due to the globalization of economies, the interdependence of international financial markets, the technological advances, and the development of expertise and capabilities of money launderers and terrorism financiers, who exploit the newest and most complicated technologies and communication systems to achieve their filthy objectives.

This fact has somehow developed banking from a Risk Management function to a Compliance Management function.

Therefore, we recognize that combating money laundering and terrorism financing requires: (1) understanding their resulting risks; (2) discovering vulnerabilities and weak areas; and (3) high commitment. In this regard, I would like to stress that over the past years, Arab banks have done huge efforts and dedicated large investments to protect themselves, their economies, and their global partners from the leak of dirty money. I can assure you that considerable progress and success have been recorded. More broadly, the Arab banks are committed to their role in the global combat against money laundering and terrorism financing. They have already implemented procedures to strengthen their compliance functions in order to comply with the global regulations and recommendations, particularly those required by the US authorities. In parallel, the Arab central banks and regulatory bodies have already developed policies, procedures and regulations to enforce the compliance with global anti-money laundering and terrorism financing requirements.

Ladies and Gentlemen, I would like to raise – once again – a concern regarding the correspondent relationships between US and Arab banks. We all know that US banks cannot provide correspondent banking services to foreign banks that do not have sound compliance procedures. This is totally understood. Nevertheless, many Arab banks – and despite the fact that they have developed compliance procedures and comply with the global anti-money laundering and terrorism financing compliance requirements – face increasing difficulties in maintaining correspondent banking relationships with the U.S. banks. Correspondent banking is crucial for the Arab countries for money transfer services, foreign trade, and foreign investments. Therefore, a deterioration in corresponding relationships will definitely have repercussions on economic growth, social development, and financial inclusion.

Ladies and Gentlemen, Combating money laundering and terrorism financing and Compliance require effective, definite, and sincere global cooperation, on both the private sector and public sector fronts. We – as representatives of the Arab private sector – are committed to performing our role, and cooperating with our US partners in this regard. On a final note, I hope that this conference will further strengthen the ties between the US and the Arab banking communities, and will coordinate and harmonize our efforts in combating money laundering and terrorism financing. Thank you for your attentive listening.