J.P. Morgan Chase, Citigroup and Bank of America are among major banks which have failed to prevent money-laundering taking place through their accounts, the Wall Street Journalreported today, citing a new US Senate staff report.
The report said 12 offshore banks have moved billions of dollars through US correspondent accounts in the past several years.
In many cases the banks themselves were unaware of the nature or background of their own clients because "most US banks do not have adequate anti-money laundering safeguards in place to screen and monitor such banks, and this problem is longstanding, widespread and ongoing," the report said.
The report was issued by the US Senate Permanent Subcommittee on Investigations, which has been studying so-called correspondent banking relationships for the past year.
The report recommends US banks be barred from opening correspondent accounts with foreign "shell" banks that have no physical presence, and says US banks should heighten their due diligence and safeguards for banks with offshore licenses or in "high-risk" jurisdictions.
Many of the banks named in the report said they have already taken steps aimed at preventing abuses of their correspondent bank accounts, the Journalsaid.
AFP