Israel’s Israel Banking Authority says $15 billion loan to US firm may be blocked by US law
- by admin
A bank in Israel is under pressure from US law enforcement agencies to repay an $15.9 billion loan that it says it cannot legally issue because it is in violation of a U.S. law barring money laundering and terrorist financing.
In a statement, Israel’s banking authority said it was considering a court order to force the bank to repay the $15 million it owes to US-based shell credit union shell Capital One and to prevent the payment of any more loans from other banks.
The bank said it had received the order on Monday.
The law has been in place since the end of the Bush administration, and it was intended to stop foreign banks from laundering money and financing terrorism.
The Israel Banking Agency said it would make its decision by late Tuesday.
Israel has been under increased scrutiny by Washington since the Sept. 11, 2001, attacks on the United States and its allies in the Middle East.
The country is currently embroiled in a legal battle with the US over the sale of land in the West Bank, and the Justice Department is investigating alleged violations of the Foreign Corrupt Practices Act by some Israeli officials.
The Israeli Finance Ministry said it received the Treasury Department order Monday, and that the ministry will issue a written response by the end the day.
The Treasury Department has ordered Capital One to repay $4.7 billion of the $10 billion it owes in a loan the bank says it is unable to issue because of the law.
The lender, which had said in a court filing last year that it was “unable to issue a loan in compliance with this statute,” said it will seek the same repayment from the Bank of Israel.
In February, US prosecutors charged that two top Bank of America executives and a top Bankers Trust executive in a separate bribery scheme.
The Bank of Manhattan and Bank of Canada were also investigated, but no charges were filed.
A bank in Israel is under pressure from US law enforcement agencies to repay an $15.9 billion loan that it…
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