The latest fallout from a combined Manhattan District Attorney and Treasury Department investigation has settled on a Red Chinese firm and several Iranian firms, with some useful idiots in the form of Western banks stuck in the middle.

The last time this investigation erupted was when Bank Melli, the world’s largest Shariah-Compliant financial institution, was put under sanctions by the US. We covered that here on SFW:

http://www.shariahfinancewatch.org/2009/03/04/treasury-designates-companies-tied-to-iran’s-bank-melli-as-proliferators/

At that time we pointed out the fact that promoters of Shariah-Compliant Finance tout it as “ethical” investing, yet the world’s largest Shariah-Compliant financial institution, Bank Melli, is involved in all sorts of operations associated with proliferation of weaponry and terrorist financing.

Now we use this latest development to point out an Achilles Heel in US financial due diligence. According to the Treasury Department and the Manhattan District Attorney, the following banks were “duped” into this scheme to get nuclear and missile technology to Iran by a Chinese businessman:

• Bank of New York Mellon Corp.

• Bank of America Corp.

• J.P. Morgan Chase

• Wachovia

• American Express

• Citigroup

All of these banks, despite all of their high-powered and high-priced legal advice and sophisticated compliance departments were fooled into processing dozens of transactions which provided material support for Iran’s weapons programs.

These same banks have Shariah-Compliant divisions and insist that there is no danger posed from Shariah Compliant Finance, Shariah, zakat payments or the Shariah scholars that they employ.

How are they so sure? Their high-powered, high-priced legal advisors and sophisticated compliance sections are on the job…We’re sorry if we remain somewhat skeptical…

http://www.bloomberg.com/apps/news?pid=20601087&sid=aAavYa09vymg&refer=home

 

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