Bank of China denies aiding terrorists

The Jakarta Post   |  Wed, 08/27/2008 12:33 PM  |  World

A major state-owned Chinese bank on Wednesday denied accusations in a lawsuit filed in Los Angeles that it transferred money to terrorist groups and said it would fight the case.

"The accusation is absolutely groundless," Bank of China Ltd. said in a statement. "Bank of China is prepared to fight the suit."

The lawsuit filed last Thursday by victims of terrorism in Israel accused the bank of putting through dozens of wire transfers totaling several million dollars to Hamas and Islamic Jihad and ignoring Israeli demands to stop the practice. The lawsuit said the money helped to finance attacks between 2004 and 2007.

The Beijing-based bank "knowingly assisted Hamas and the Islamic Jihad," the lawsuit alleged.

Bank of China, the country's third-largest commercial lender by assets, said it adheres to U.N requirements on anti-money laundering and anti-terrorism financing. It said the bank's own policies forbid providing financial services to terrorist groups.

The U.S. lawsuit says Israeli officials met with Chinese police and central bank officials in 2005 seeking action to prevent Bank of China from making more transfers but the practice continued.

Transfers for Hamas and Islamic Jihad were initiated in the Middle East, sent to branches in the U.S., then to an account at a bank branch in Guanzhou, China, the suit said. It said the money was then wired to group leaders in Israel, the West Bank and Gaza Strip.

China's first anti-money laundering law took effect in 2007 and requires banks and other companies to keep a database of clients' background information and to report large and suspicious transactions.

A total of 1,239 cases involving 387.1 billion Yuan (US$56.5 billion) were reported to police by the end of 2006, according to the Web site of the central bank's China Anti-Money Laundering Monitoring and Analysis Center. It gave no details of whether any cases resulted in criminal penalties. (and)

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