For bank compliance staff, the news might sound alarming: U.S. officials have questioned the British government over whether Islamic banking institutions have played loose with counterterrorism financing controls for charity accounts. The diplomatic cable, sent in June 2006 by the U.S. Secretary of State and published in March 15 by Wikleaks.org, questions the alleged vulnerability of Sharia-compliant banks to structuring transactions below reporting requirements to funnel charitable donations to al-Qaida. The concerns led to a U.S. embassy investigation of how the British government was supervising the institutions, according to the cable. But concerns about the Muslim banks, which are designed...
In the financial compliance world, debt repayment doesn't usually attract much in the way of negative attention. But in the context of other red flags, sudden debt reimbursement can signal that a client is following a little-known stricture for Islamic soldiers who may soon die in battle.
Nearly a month after the start of a 6-month abatement of Iran sanctions, U.S. officials have offered scant details on a promised financial stream for charitable donations to the country. In fact, say some humanitarian aid groups, nothing has changed at all.
A dedicated group of intelligence consultants are sounding the alarm over the growth of Islamic banking and its potential nexus to radical Islamic and terrorist causes, even as many in the banking industry dismiss their concerns as overstated.