Today all countries around the world submissively concede to the “rule of law ”, and consciously avoid the application of the so called “rules of practice“. This is because every economy has its own distinctive commercial features which entail specific, thorough and vigorous practices to guarantee the sound processing of legitimate transactions only whilst preserving the rights of the various parties to these transactions. As such, legal systems continue to enact meticulous commercial codes to regulate every single aspect of all types of commercial contracts, including import and export deals. (See SubArticle 16f UCP600 and BankAzaro Case ).

Depicted by the term itself, “Standard Banking Practice” is an illustration of a set of “standard” or “general” indicative rules which would hardly be acceptable to modern day banks who normally adopt intricate strategic plans specifically set to differentiate their individually distinctive cultures, products and processes by value-added elements privately tailored to customize all corporate, personal and trade solutions. Thus, the terms “Standard Practice” and “Rules of Practice” are inherently ruinous and completely delusional.

As such, countries seldom depend on these sets of remotely written erroneous rules. Not only because such rules often work to the detriment of the parties of any commercial contract, but also because of their negative impact on the society as a whole; The frenzied increase in volumes of money laundering and fraudulent transactions, in addition to the deteriorating financial performance of numerous commercial banks in several countries around the globe, indisputably prove that unified rules of practice are totally and completely disastrous. (See UCP600 Unspoken Consequences).

Because standardizing processes on a global or even regional scale is a practical impossibility, large banks have their own bylaws, internal regulations, and instruction manuals professionally set by their risk executives to suit their own unique requirements. These banks not only account for all sort of perils, they actually foresee the dangers that may arise from the various risks they confront and take all necessary measures to protect themselves from consequential potential damages. These banks perfectly control, in a systematic manner, the various procedures pertained to each type of transactions the bank undertakes.

Recent cases around the world have proven that the application of said informal rules of practice on international trade deals has led to an unprecedented proliferation of fraud cases and money laundering transactions; organized crime has flourished and is rapidly spreading all over the world drastically worsening the global economic crises only because the so called “rules of practice” has actually created an environment conducive to omitting placement of effective operational controls to halt illegitimate and erroneous transactions (see Sub-article 7 c of the UCP600 and definition of the term “Negotiation” in Article 2 of the UCP600).

The reason for the deteriorating performance of banks which applied said “informal” rules, is that the rules implicitly, and explicitly indeed, encouraged financial institutions not to undertake those vital protective operational measures needed to ensure that the transactions they process are in fact legit. Additionally, the rules urged banks to merely check the documents presented only to ensure that they “appear” to be in order and conform to the requirements of the letter of credit instrument. The dilemma lies in the fact that banks are indemnified from any legal responsibility if these apparently accurate documents turned to be forged or fraudulent (see Articles 4, 5 of the UCP600). This is completely deceptive, because the social responsibility of any bank far transcends any legal liability; A bank involved, intentionally or negligently, in a money laundering transaction would suffer huge damages even if it managed to escape the judicial liability. And it may well collapse regardless of its size; the maxim “too big to fail“ doesn‘t apply in such situations.

Fiddling around, in a rather negligent manner, with terms like “on its face”, “reasonable time”, “reasonable care”, “honour“, “negotiation” and the like whilst totally ignoring several interrelated aspects of the transaction such as credit legitimacy , organized crime, languages, disparity of operations, linkage, national marine practices, maturity dates, drafts, dynamic risk elements, etc may well place the issuers of these rules under legal liability.

The ICC, knowing that they were being trusted, that their skills were being relied upon and that their judgment is occasionally referenced authoritatively, must be held responsible for all the errors and mistakes contained in the UCP600 and any other rules of practice sanctioned by them, especially that they themselves, together with the “Institute of International Banking Law and Practice – IIBLP” are promoting these erroneous rules.”

The globally unified rules of practice can hardly form any sort of legacy; Be it rules for international trade, reimbursements, guarantees, collections, arbitration, fraud, corruption detection etc, these rules truly endanger the institutions applying them by totally ignoring several vital facets of any transaction, implicitly protect organized crime and harm the economy in which they are applied; It is only the national laws and internal bylaws that provide exemplary protection for all parties of a commercial deal.

Banks today are required to inaugurate their own specific “complete” rules and structure their operations so that they would be able to eradicate any money laundering and fruadulent transactions; relying on “rules of practice” is simply destructive. Thus, it is much safer to remove all indications to such rules from the issued commercial and financial instruments, for example “This LC is subject to UCP600″ can be replaced by a phrase “The LC is subject to the prevailing national commercial law”. 

The operational correlation between the trade services division and trade finance departments can best be explored by reading our new Book ”Corporate Banking Credit”.

Respectfully;

Jacob E. Sifri, AR LSE   CDCS, email jsifri@graincon.com

www.graincon.com  

All rights resereved

From the Wall Street Journal

New York, N.Y.:

Nov 30, 2011.

Abstract (Summary)

Wall Street securities firm Morgan Stanley doesn’t fund its day-to-day activities in the overnight debt markets, and its secured funding activity is conducted through broker-dealer units whose A-1 short-term debt rating wasn’t affected by a Standard & Poor’s Ratings Services downgrade of Morgan Stanley on Tuesday. A Global Finance article Wednesday incorrectly said the parent-company downgrade would make it more expensive for the firm to fund day-to-day activities in the overnight debt markets.

(WSJ Dec. 1, 2011)

Standard & Poor’s Ratings Services downgraded more than a dozen large banks, including the six biggest U.S. financial institutions, in the latest shot across the financial sector’s bow from a major credit-rating firm.

S&P downgraded 15 big banks to reflect new rating methods the firm has been putting in place over the past year. The new guidelines sharpen the focus on how banks would hold up under market and economic stress, and on the likelihood of governments providing extraordinary support to troubled institutions.

The changes to bank criteria are the latest bid by S&P to revamp the methodology it uses to determine ratings on everything from collateralized-debt obligations to bond insurance, following criticism from lawmakers and investors that its ratings during the 2008 financial crisis didn’t accurately reflect the risk of investments.

Among those whose ratings were cut by a notch were J.P. Morgan Chase & Co., Bank of America Corp., Citigroup Inc., Wells Fargo & Co., Goldman Sachs Group Inc. and Morgan Stanley.

For some, including Bank of America and Morgan Stanley, their short-term debt ratings were cut by a notch, as well, which will make it more expensive for them to fund their day-to-day activities in the overnight debt markets.

Shares of U.S. bank stocks slipped in after-hours trading following the announcement by S&P. But the damage of the downgrade was mitigated by how widely expected the move was, the fact that the downgrades don’t signal changes in any of the banks’ individual credit metrics, and that the rating cuts were limited to one notch. Lower ratings tend to raise banks’ borrowing costs and can force them to post additional collateral to satisfy agreements with trading partners.

Even though Bank of America received a downgrade, the one-notch drop is “a very good outcome” based on the “range of possibilities” under consideration by S&P, said a person close to the bank.

S&P had earlier warned that Bank of America and other banks could drop by several notches.

When Moody’s Investors Service downgraded Bank of America by two notches in September, the bank said in a filing that it could be required to post an additional $3.2 billion in collateral against its derivatives contracts as a result of the move.

If all three rating agencies had downgraded the bank by one notch before the end of the third quarter it would have had to post an additional $5.1 billion in collateral, according to the filing. But that number is no longer relevant since S&P pulled the trigger on its announcement after the end of the third quarter.

Citigroup said the downgraded ratings “do not accurately reflect the significant progress Citi has made over the course of the last three years.” Bank of America, J.P. Morgan, Wells Fargo, Goldman Sachs and Morgan Stanley declined to comment.

The first wave of rating changes affected 37 firms. S&P raised its ratings on two Chinese banks, Bank of China Ltd. and China Construction Bank Corp., and kept its ratings on 20 financial companies unchanged — including several big European lenders, such as BNP Paribas SA and Deutsche Bank AG.

—

Dan Fitzpatrick and Matthias Rieker contributed to this article.

Credit: By David Benoit and Jeannette Neumann

LONDON — Royal Bank of Scotland Group PLC was hit with a cease-and-desist order by the Federal Reserve Board Wednesday over violations of federal money-laundering laws, the latest effort by U.S. regulators to crack down on foreign banks’ compliance with U.S. law.

The order follows similar moves aimed at banks such as HSBC Holdings PLC and Barclays PLC. At RBS, the order isn’t a response to a specific incident, but rather is intended to beef up defenses against customers attempting to launder money or send funds to countries under sanction by the U.S.

It requires RBS to improve oversight of its U.S. operations and, more specifically, requires its businesses in the U.S. and the U.S.-based operations of an RBS Netherlands unit to improve risk-management practices and compliance with laws relating to money laundering, bank secrecy and U.S. economic sanctions.

The action gives RBS 60 days to provide written plans to federal and state regulators detailing how it will consolidate supervision of its U.S. unit, and the unit’s compliance with laws relating to money laundering, financing of terrorism and U.S. sanctions. RBS has agreed to take such steps.

It also includes an order to show how the bank will beef up technology to track its compliance, as well as a directive to undertake a comprehensive evaluation of the staff at its branches.

In addition, the bank must submit a revamped risk-management plan for the U.S. and draw up a “customer due diligence program” to ensure that suspicious transactions by customers are identified and reported.

RBS, based in Edinburgh, has substantial investment-banking operations in Stamford, Conn., as well as branches in the Northeast and Midwest through its retail bank subsidiary, the Rhode Island-based Citizens Financial Group.

An RBS spokesman said the bank has been cooperating with regulators throughout the investigation that led to the order and has already taken significant steps to correct deficiencies.

“We set and expect higher standards than those that resulted in this order,” RBS Chief Executive Stephen Hester said in a statement released Wednesday. “RBS is well advanced in addressing the deficiencies noted by the U.S. banking authorities.”

The bank has already created a position of chief risk officer, overseeing the whole business and reporting directly to the chief executive; doubled the number of staff monitoring compliance with money-laundering laws in the bank’s U.S. investment-banking business; and upgraded automated systems to flag potentially problematic activity, the RBS spokesman said.

RBS is the latest foreign bank in the U.S. to be issued such an order, as U.S. regulators focus on possible breaches of money-laundering and bank-secrecy laws in response to the Sept. 11, 2001, terrorist attacks.

In October, HSBC received a similar order from the Fed and the Office of the Comptroller of the Currency after an investigation found the banking company’s procedures violated U.S. banking laws.

The probe had focused on HSBC’s “correspondent” banking business, a unit that sends and receives funds from banks overseas, among other HSBC business areas.

As a result of a similar investigation, London-based Barclays last year agreed to pay $298 million and admitted to processing payments to the U.S. from clients in Cuba, Sudan and other places that were under U.S. sanctions at the time.

The U.K.’s Lloyds Banking Group PLC and Credit Suisse Group AG of Switzerland also agreed to settlements. They agreed to payments totaling $350 million and $536 million, respectively.

Credit: By Sara Schaefer Munoz

The quest to confiscate money allegedly stashed in overseas bank accounts by former Tunisian President Zine al-Abidine Ben Ali has an important new advocate: Enrico Monfrini, a Swiss lawyer known for his success in clawing back millions hidden by kleptocrats.

Mr. Monfrini–who will help coordinate Tunis’s global push to recover the money–was hired by the Tunisian government this month, according to Tunisia’s central bank governor. The hiring of the 67-year-old Geneva lawyer, a leading asset-recovery specialist, could help push the painstaking process forward. Mr. Monfrini has worked on high-profile cases involving Haiti, the Democratic Republic of Congo and Nigeria.

The move comes as efforts to recoup Tunisian assets in Switzerland as well as France got a boost. The Swiss Justice Ministry this month formally accepted a request from Tunis to begin the process of confiscating 60 million Swiss francs ($68 million) frozen in Swiss banks. Meanwhile, the Swiss federal prosecutor and French magistrates have opened separate corruption-related inquiries into Mr. Ben Ali and his associates, which could speed the process of building a case and, if they are found guilty, perhaps ultimately return money found to be tied to corruption, if any, to Tunisia.

Mr. Monfrini, the son of a Swiss diplomat who spent part of his childhood in Africa, played an instrumental role in securing the return of more than $1 billion allegedly stolen by late Nigerian strongman Sani Abacha, among the largest asset-recovery cases to date. In 1999, the Nigerian government hired him to lead the global effort to find Mr. Abacha’s fortune.

The government gave Mr. Monfrini the details of only a few Swiss accounts that were already closed. But the attorney argued that the size and scope of corruption by the Abacha clan meant the family acted as a criminal organization. After a Swiss judge accepted that reasoning, Swiss banks disclosed dozens of accounts holding $650 million, leading to money stashed in Luxembourg, Liechtenstein and the U.K. The Abacha family fought the restitution, but ultimately lost.

Mr. Monfrini says he will similarly argue that the Ben Ali regime acted as a criminal organization. Mr. Monfrini says he has already seen evidence of assets such as homes owned by Ben Ali associates in Europe and plans to search for funds in France, the Middle East and Canada. “I think we can close the case in 12 months,” he says.

Mustapha Nabli, governor of the Tunisian Central Bank and head of the national committee overseeing the asset-recovery effort, said those assets include money in bank accounts, shares in companies, real estate, planes and “who knows what else.” He added that they don’t at this stage have a reliable figure of the value of those assets.

The recovery process is gaining traction, and now it is a question of “the time it takes for things to go through the judicial system,” Mr. Nabli said.

“It’s a very good move by the Tunisians,” said Mark Pieth, head of asset-recovery group International Centre for Asset Recovery, which has helped the Tunisians with the Ben Ali case. “With Nigeria, Monfrini was able to go after money in a number of countries. The Tunisians need help to get the full picture.”

A lawyer for Mr. Ben Ali, Akram Azouri, said his client “was never involved in corruption” and didn’t have any assets overseas.

The Swiss, anxious to shed an image as a haven for assets stolen by foreign kleptocrats, have this year been quick to freeze about 1 billion Swiss francs allegedly stolen by former leaders in Tunisia, Egypt, Libya and the Ivory Coast.

The Swiss Foreign Ministry sent a former Geneva magistrate to Tunis in recent months to help Tunisian judicial authorities draft a formal request for assistance in getting the frozen money back, after previous requests were found lacking, according to a person familiar with the situation. As a result, the Justice Ministry accepted the latest request early this month and handed it over to a federal prosecutor in Lausanne. The prosecutor is examining the request, and has also opened a separate criminal investigation into allegations of money laundering by members of the Ben Ali regime, according to a spokeswoman for the prosecutor’s office.

The move could speed the process, because the prosecutor has the power to seek further information both from the Swiss banks and Tunisian authorities.

Swiss authorities also have taken steps to assist Egyptian authorities with their efforts to recover assets related to former President Hosni Mubarak. The Swiss Federal Prosecutor’s office has opened a criminal case into allegation of money laundering by members of the former president’s regime. And, Switzerland has frozen about 410 million Swiss francs of assets allegedly belonging to the former president and his allies, according to Ahmed Saad, a member of Egypt’s judicial committee of asset recovery. Mr. Mubarak’s lawyer couldn’t be reached to comment.

However, the Justice Ministry has yet to accept a request from Cairo for assistance in returning those assets to Egypt, saying authorities there have not yet provided enough proof that the frozen funds are tied to corruption in Egypt.

Authorities in Egypt say they believe the total overseas assets connected to him and his associates could be about $9 billion or $10 billion.

Credit: By Deborah Ball And Cassell Bryan-Low

Money Laundering - British Banks

By Deborah Ball  – Wall Street Journal (Online)  Nov 11, 2011.

c) 2011 Dow Jones & Company, Inc. Reproduced with permission of copyright owner. Further reproduction or distribution is prohibited without permission.

ZURICH–Swiss regulator Finma may discipline four banks for having what it called lax controls on accepting money from foreign public officials associated with deposed Middle Eastern and North African leaders, but generally found that the country’s lenders complied with anti-money-laundering rules.

In a report released as Switzerland struggles to shed a reputation as a haven for kleptocrats looking to stash funds abroad, Finma said Thursday it found serious shortcomings in how four banks dealt with accounts held by foreign officials tied to former governments in Tunisia, Egypt and Libya, including one bank that accepted seven-figure deposits from a public official who claimed to be semiretired. Finma, which declined to name the banks, will now consider disciplinary action.

Generally, Finma generally found little fault with the way Swiss banks handled money coming from these regimes, despite charges from activists that the country’s banks don’t do enough to keep out money from corrupt foreign officials and criminals. Finma’s findings are also in contrast to a June inquiry by U.K. regulators, which found poor anti-money laundering practices at about three-fourths of British banks.

Early this year, following the toppling of regimes in Tunisia, Libya and Egypt, the Switzerland moved quickly to order banks to freeze assets associated with the governments, an action that ultimately affected about 830 million Swiss francs ($912 million). While the government’s move was aimed at showing that Switzerland no longer welcomes money from corrupt public officials, the large amounts gave new life to accusations that Swiss banks do too little to ensure they are not accepting money from such people.

For decades, Switzerland’s lax money-laundering standards and strict bank secrecy made it a favorite hiding place for corrupt foreign money. But under enormous international pressure, Switzerland–the world’s largest offshore banking center with $2.1 trillion in foreign money under management—has brought its money-laundering laws up to international standards over the last decade.

In the wake of Bern’s order to freeze Egyptian, Tunisian and Libyan money, Finma examined whether the 20 Swiss banks that held such funds had complied with rules regulating the treatment of accounts held by foreign public officials. Those rules require banks to check on the origin of such funds to ensure the money doesn’t come from illicit activity.

The 20 banks froze accounts belonging to 29 Tunisian, Egyptian and Libyan officials. The government freezing order affected dozens of officials and family members tied to leaders in the three countries. Switzerland’s Federal Prosecutor recently opened a corruption investigation into money associated with former Tunisian President Zine al-Abidine Ben Ali.

The Finma investigation, which began in March, found that most of the 20 banks complied with the rules, with minor shortcomings at only a handful of banks.

However, it found serious lapses at four banks, including one case in which seven-figure deposits weren’t adequately investigated. Another bank failed to report an account held by a public official who was on the Swiss government’s freeze list, while another took on a client after a rival bank terminated the relationship because of illegal transactions, Finma said.

While Switzerland generally complies with international anti-money standards, it has been criticized for the low number of suspicious transaction reports filed by banks, given the enormous amount of offshore money in Switzerland. The banking lobby has protested the government’s orders to freeze assets this year and is pushing for limits on Bern’s power to do so in the future.

Andre Rothenbuhler, head of Swiss activist group Aktion Finanzplatz Schweiz, criticized Finma for only examining the banks involved in this year’s freeze. “We are disappointed by the results,” he said. “They haven’t gone very far.” He also urged Finma to publish the names of the four banks found to be deficient once the inquiry is finished. Finma rarely names banks that are subject to regulatory action.

A Finma spokesman said the regulatory body examines how banks deal with foreign public officials as part of its annual supervisory reviews.

The Swiss findings are mild in comparison to the results of an inquiry by the U.K.’s Financial Services Authority, which found widespread deficiencies in anti-money laundering practices at British banks. In June, the FSA said it would likely pursue enforcement action against at least two banks.

Write to Deborah Ball at deborah.ball@wsj.com

Credit: By Deborah Ball

Because crimes of drugs and human slavery are totally rejected by the vast majority of individuals and societies, recent history has proven that even larger and stronger banks can’t endure one money laundering scandal, regardless whether the bank’s involvement was intentional or it was merely negligent.

With a shameful amount of approximately 1.7 Trillion dollars in crime money cleared throughout the global banking system every year, “organized crime” can afford to control full political systems to serve its purposes. This in itself poses a huge threat to any bank operating within the reach of their influence.

In analyzing the methods “organized crime” uses to carry out its illegal activities and the impact of such activities on the national financial system, this article explains how corrupt politicians and bankers work together to create a whole financial environment conducive to expanding fraudulent activities and increasing money laundering transactions.

To achieve this obligatory aim, the government places a legislating system, a judicial system and an administrative/police system all of which are functionally integrated to create an environment that allows its citizens to securely pursue their national aspirations and personal objectives. Thus, the government also works consciously on achieving the ideal employment of local resources in creation of a national wealth to be distributed amongst its citizens in various mechanisms which would ensure the highest possible level of justice amongst all constituents of the political regime managed by the government.

The ideal achievement of said strategic aim would gradually eradicate crime and criminals. This in itself endangers not only those persons who are directly involved in all sorts of criminal and fraudulent activities, but also other governmental and influential figures who shield those criminals and facilitate their prohibited operations by altering the prevailing laws or completely removing/deactivating any legislation of impact on their illegal activities. Unfortunately, nowadays such high ranked influential politicians are numerous and do have a powerful effect on the whole governing regime including its police and military forces. This is especially true in powerful western countries like America, England, France, Italy and Russia.

Jordan is an exemplary model to analyze how a country with a prosperous economy and a strongly correlated ethical religious society can be turned into a drastically fallen economy rife with corruption and drowned in poverty. It is not a coincidence that the economic situation in Jordan is similar to that in numerous other countries around the globe such as Lebanon Greece, Egypt, India, Italy, Ecuador, Iraq and many others: The financial and monetary policies adopted in all these countries are actually imposed by the same source i.e. the global debtors like the World Bank, the International Monetary Fund, the European Commission, etc. These debtors require the indebted countries to adopt financial and monetary policies which only serve to divert, directly or indirectly, the national wealth of each country to the debtors themselves leaving the people in poverty, chronological unemployment and high inflation whilst the debtors proclaim full ownership of the country’s natural resources, including its human resources (Source Confessions of the Economic Hit Man by John Perkins).

To understand the lines of communication between these outlaws and the structure of their inconspicuous criminal organization, it is useful to address the case of a wealthy influential Jordanian named Khalid Shahin, who was recently imprisoned after a major corruption scandal related to the national oil refinery only to be seen dining in a restaurant in London after few days of his imprisonment. The case has caught the attention of the media and largely embarrassed the government especially when it was revealed that the prisoner was released by formal order of the top authority in the prime ministry. Khalid Shahin was arrested and a new investigation as to his release is being conducted.

This case is one of a huge significance to all national parties undertaking the responsibility of combating crime, corruption, fraud and money laundering not only because Khalid Shahin was known to be a close friend and a business partner of the Jordanian monarch, but also because of his relationship with KBR, a subsidiary of the giant American corporation Halliburton.

In 2004, Khalid Shaheen was awarded a $72 Million Pentagon contract to supply fuel to coalition forces after the fall of late Iraqi president Saddam Hussein. The contract, nevertheless, was cancelled after one week when an anonymous complaint was made about Shahin’s involvement in smuggling oil from Iraq and also questioning his ability to perform under the contract.

In an article of Claudio Gatti, a NY based investigative reporter, Gatti says in describing how Shaheen managed to get the contract “… is further evidence of the problems that arose in the allocation of contracts for supply and reconstruction in Iraq after the US-led invasion. The contract was the result of one of 10 tenders arranged after KBR, a Halliburton subsidiary, was accused by US congressmen of overcharging the US Army Corps of Engineers by up to $ 61 mm for petrol supplied to troops in Iraq a charge Halliburton denies.

The Pentagon asked the Defense Energy Supply Centre (DESC), the government procurement office that took over fuel supply from the US Army Corps following the Halliburton controversy, to award contracts through “competitive procedures to the maximum extent practicable“. In March 2004, one of the contracts was awarded to Millennium, a Jordanian holding company owned by Khaled Shaheen and his brothers Riyadh and Akram.”.

Khalid Shaheen was first sued by “Standard Chartered” in Dubia back in 1992-1993, he then moved his business to Arab Bank in London where he was granted lines of credit facilities for over $40 Million under the name of his company “Shaheen Business and Investment Group (SGIB). In 1995, however, Arab Bank London requested Khalid Shaheen to liquidate his accounts and after rescheduling the whole debt, the case went to a Jordanian court. In the year 2000, the court froze their assets based on the claims of Arab Bank for $40 Million and Standard Chartered for $77Million.

At this time, the story was in all local newspapers. The Shaheen‘s reputation was totally ruined and they were black listed internationally. It became known to everyone that they are insolvent. Surprisingly, however, Khalid Shaheen was granted by HSBC Jordan loans for $20 Million based on a recommendation made by two local credit executives who were fully aware of the credit risks of granting such facilities to an insolvent disrespectful firm. Later on, Shaheen was also introduced to HSBC Bahrain who in turn granted them more than $70 million in credit facilities.

These large amounts wouldn’t have been granted by the bank without the approval of a credit committee of high authority in addition to the approval of the central bank of Jordan. Obviously the strong net of corruption is very influential and it far transcends the highest authorities of Jordan and HSBC’s regional management; the two local credit executive wouldn’t have made the recommendation if they were not instructed to do so by a higher authority; the central bank wouldn’t have approved the credit process if they didn’t receive instructions from a higher authority. The HSBC’s credit committee would have approved the recommendation to grant about $100 million had they not received instructions from a higher authority probably in London.

Shahin then moved his business to the Housing Bank who in turn granted him loans despite his known illegal past history. This case has truly endangered the whole political regime in Jordan and led to igniting constant demonstrations demanding not only to bring the corrupt to Justice but also to transfer all the power and authority from the monarch to the prime minister under the supervision of the parliament.

In a country under the rule of law, the judge who sentenced Shaheen to jail, should have immediately questioned, and indeed investigated, the motives behind which the two local executives had prepared a whole credit proposal for 20 million US Dollars and recommended to grant it to a black listed name. Granting a credit facilities is indeed a complex process that is firstly based on the good reputation of the applicant. It was clear that both executives had violated the national laws and should have been also subjected to a complete investigation in order to uncover the higher authority which instructed them to violate the law, and the personal share they each had.

The central bank officials who granted the approval for the loan and the bank’s credit committee should have also been called for investigation as this is a very clear case of corruption. The third local bank which also extended credit in the aftermath of the alleged liquidation of their account with the HSBC, should also have been questioned, especially if the facilities lines extended are large.

Nevertheless, instead of subjecting them to proper investigations, all those involved in this scandal were financially and professionally rewarded! The two credit executives became rich and one of them was appointed as the CEO of a major Emirate bank and the second became the head of the corporate banking division of one of the biggest banks in Jordan. The deputy governor of the central bank became the governor and the governor became the minister of finance. So instead of indicting and panelizing them for either corruption or negligence, they are now a complete corrupted gang ruling Jordan in its entirety. And because these figures are unqualified as well, one would expect a further decline in the economy and consequently higher external debts, higher inflation rates and higher unemployment until the country is fully owned by its debtors.

Of course the people are already aware of the corruption swamp the financial system is deeply drowned in and this clearly explains the constant demonstrations filling Jordan from south to north. Any bank in such situation would expect an outraged eruption of a people’s revolution and an overturning of the ruling regime in its entirety. This would eventually lead to a cancellation of ownership beyond certain reasonable limits as a possible solution to remedy the economic situation, deprive the fraudsters/corrupt from their illegal belongings in addition to retrieving the stolen lands, assets and cash to the treasury.

Many argue that all banks led by locals here in Jordan are part of the political regime and they are truly bound by oppressive obedience to the higher governmental authority, obviously this is very dangerous especially that over 90% of the bank‘s audited financial statements reveal active money laundering transactions, financial fraud and low liquidity, which would indicate that the citizens’ deposits have been wasted and several banks have already collapsed.

Additionally, the reports presented by the World Bank, IMF and Ministry of Finance are intentionally forged. For example whilst these reports had shown a GDP per capita of $2000 per month, the actual figure is less than $50 per month.

Whilst the external debt of Jordan has reached $17Billion and still increasing, the people are confident these astronomic amounts were used in a fraudulent way and were not spent to the benefit of the Indigenous inhabitants. Hence, the revolution continues and locals are determined to cancel these debts by means of delegitimizing the whole decision making process that led to the engagement in this unwarranted external debt.

To be continued…

An article of Jacob Sifri , All rights reserved www.graincon.com

UCP600

Corporate Banking Credit

Format: Paper book and pdf
ISBN: 978-9957-74-202-7
Publisher: Darkonoz
Number of Pages: 197
Publication Date: 5Oct2011

eBay Link Corporate Banking Credit

The new Book “Corporate Credit in Banking”, a practical guide to corporate banking credit, has been released and is now in circulation world wide

Credit is the core service a commercial bank offers. It is therefore essential for bankers of all grades to understand the role of credit in the bank regardless of whether or not they are directly involved with credit operations.

This is not a financial analysis book; this in fact is the only available CREDIT ANALYSIS and RELATIONSHIP MANAGEMENT reference guide. It comprehensively tackles all issues confronted by the credit executive, manager and officer during thier day-to-day work. It covers banking credit strictly from a practical banking perspective.  

The text avails academics and professionals concerned with banking and finance of a unique opportunity to explore the differences between the concepts of trade services and trade finance, in addition to understanding the mechanisms of interaction between these two distinctive domains. The Book coherently addresses the current global shift in trade and finance.

For credit relationship executives and officers, the text represents the exemplary reference by which one would acquire the financial skills required to accurately apply the principles of lending, analyze customers’ financial statements, interpret customers’ accounts and structure facilities; it details the principles of lending, handling securities, funding working capital, structuring trade finance, ratio analysis, credit procedures and relationship evaluation.

To completely eliminate any feeling of vagueness or mystery about corporate credit, the text comprises of three sections, specifically: Understanding the Nature of Corporate Lending, Types of Corporate Credit and Setting Corporate Limits.

As a reliable source, the Book serves a multitude of objectives the achievement of which facilitates the optimization of the bank’s outstanding credit portfolio, expanding clientele base and strengthening bank-customer relationship. It enables the reader to understand the proper analytical methods to soundly evaluate the financial, managerial and commercial standing of the client. Additionally, it helps the staff to understand the bank’s corporate credit policy and acceptance criteria.

Imagine how powerful your bank would be when your cadre possesses a comprehensive and accurate understanding of the customers’ business needs in addition to a complete knowledge of the features and benefits of all corporate credit products. Such knowledge and understanding are not only essential to conduct a sound evaluation of the bank-customer relationship, but also necessary to spot the relation’s warning signs and act in pursuit of effective risk mitigation.

Covering in details the various types and uses of corporate credit facilities, the Book provides an authoritative source for credit relationship executives, members of credit committees, and personnel of other grades responsible for preparing, recommending and/or approving the “Application Forms” or the “Relationship Evaluation Forms” related to the credit proposal, be it complete facilities lines or individual loans for commercial purposes.

Please read below the content of this rather challenging and accurate Book:

Chapter 1: Introduction to Corporate Banking Credit

Chapter 2: Elements of Corporate Banking Credit

 Chapter 3: Corporate Banking Credit

Chapter 4: Factor of Economics – Competition between Banks

 Chapter 5: Basel Agreement

 Chapter 6: Credit Securities

Chapter 7: Pricing and Controlling of Facilities

Chapter 8: Financial Statements

 Chapter 9: Other Facilities

Chapter10: Corporate Banking Credit – Types and Uses

Chapter 11: Types of Corporate Credit Securities

Chapter 12: Trade Services vs. Trade Finance

 Chapter 13: Credit Analysis and Financial Ratios   

All rights reserved, J. Sifri Consulting Services www.graincon.com

By Jacob E. Sifri -  First Part

Managing political risks should be the primary objective of banks operating across boarders. Nevertheless, banks in many regions tend to focus on structuring their operational risk model whilst giving lesser attention to the political risks management function. 

In assessing political risks and uncertainties of any country, it is vital to analyze both the external relations of the country with other nations and the internal relations of the various interacting social segments within the society.

This article provides a general framework for integrated political risk management, and the necessity to account, in a structured and systematic method, for foreseeable changes within the single economy.       
    
The article specifically discusses the national sentiment of the people in the United States of America and the potential economic and financial consequences that would arise from the redistribution of the American national wealth from the influential minority to the American people.

The Second American Revolution

“Still water runs deep” they say. What seems to be a quiet clueless sleeping society of Carlin’s obedient sheep, may well be a hyper tensed nation boiling with anger and resentment of every surrounding element causing unjust undermining of the dignity of not only Americans but any fellow human being. I myself have so many American friends and I know it ain’t easy to take an American for a ride, and it certainly is impossible to deceive a nation as educated as this one; In case you haven’t noticed, Americans are highly dignified, mighty courageous and fairly faithful intelligent people who simply can’t accept such deep humiliation and hardship they’re suffering.