Barclays quizzed over transactions with terrorist states

4 March 2008

Barclays Bank is facing tough questions from the US government after it may have broken rules which prohibit banks from trading with states on a terrorist blacklist.

According to the Telegraph, the US Department of Justice and the New York district attorney have quizzed Barclays over certain payments which may have been made from states which are suspected of sponsoring terrorists.

The payments in question were processed in dollars through the New York branch of the British bank and may have been made by either individuals or companies from blacklisted states.

States that the US has banned banks operating on its shores from accepting transactions in dollars from include Cuba, Iran, North Korea, Sudan and Syria.

Barclays referred to the situation in a note posted in its annual results for 2007, warning: "the potential financial effect of any resolution could be substantial".

However, Barclays has since downplayed the probe, saying the outcome of an investigation would probably not have "a material adverse effect" on its finances.

Dutch bank ABN Amro is also currently being investigated by US authorities for suspected business involving states on the terrorist blacklist.

Become a bobsguide member to access the following

1. Unrestricted access to bobsguide
2. Send a proposal request
3. Insights delivered daily to your inbox
4. Career development