Sata­bank con­firms sus­pen­sion of out­ward USD pay­ments re­lated to cor­re­spon­dent bank­ing

Malta Independent - - NEWS - Neil Camil­leri

Sata­bank has con­firmed that the “tem­po­rary” sus­pen­sion of out­ward pay­ments in US Dol­larS was re­lated to the cor­re­spon­dent bank is­sue.

Amer­i­can banks have been lim­it­ing their net­works to the United States and cut­ting down on chan­nels to the EU in a bid to ren­der them­selves only li­able to in­tra-US trans­ac­tions. This has af­fected Malta as a num­ber of banks have lost their cor­re­spon­dent bank­ing agree­ments. It has been re­ported that BOV has lost its re­la­tion­ships with two ma­jor US banks while HSBC Malta has also been af­fected but can still make use of the group net­work. Cor­re­spon­dent Banks are nec­es­sary for com­mer­cial trans­ac­tions with for­eign com­pa­nies and also for lo­cal banks to trade in the dol­lar.

Last week, clients of Sata­bank were in­formed of a tem­po­rary sus­pen­sion of pro­cess­ing of out­ward bank trans­fers in the US dol­lar cur­rency. The banks said that out­ward trans­fers in other cur­ren­cies sup­ported by Sata­bank ini­ti­ated from client ac­counts would still be pro­cessed. So would in­ward trans­fers, in­ter­nal trans­fers and trans­fers be­tween own ac­counts in USD

Re­ply­ing to ques­tions sent by this news­pa­per, the Sata­bank man­age­ment said: “As men­tioned in the bank’s no­tice is­sued on 16 Novem­ber 2016, Sata­bank plc tem­po­rar­ily sus­pended the USD out­ward pay­ments. Sata­bank plc acted pru­dently fol­low­ing de­vel­op­ments at one of the USD cor­re­spon­dent banks it uses. The lat­ter de­vel­op­ments are oc­cur­ring in USD clear­ing in sev­eral other ju­ris­dic­tions.”

The bank did not say whether the sus­pen­sion is still in place.

The PN claimed last week that the Prime Min­is­ter had flown to New York specif­i­cally to sal­vage fail­ing cor­re­spon­dent bank­ing re­la­tion­ships. It also claimed that one of the rea­sons be­hind the break­down of cor­re­spon­dent bank­ing agree­ments was the tar­nish­ing of Malta’s rep­u­ta­tion as a con­se­quence of the Panama Pa­pers scan­dal.

The Of­fice of the Prime Min­is­ter said the main aim of the visit was to at­tract new in­vest­ment to Malta but ac­knowl­edged that the Prime Min­is­ter’s del­e­ga­tion had made an ef­fort to at­tract more banks that of­fer cor­re­spond­ing bank­ing to Malta. The OPM in­sisted, how­ever, that this had noth­ing to do with rep­u­ta­tion or Panama Pa­pers and said th­ese de­vel­op­ments were a re­sult of the poli­cies im­posed on US banks in re­cent years which had noth­ing to do with Malta. “This is an is­sue that has been on­go­ing since the pre­vi­ous ad­min­is­tra­tion. Ef­forts by that ad­min­is­tra­tion did not yield any re­sults. This government is work­ing to ob­tain re­sults.”

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