Rumors abound at UN headquarters in New York over an American bank's mysterious retreat.
JP Morgan Chase, one of the U.S. banks providing retail and business services to United Nations missions, will phase out operations of its UN branch at the end of March.
In a letter sent to all 192 UN member states, Chase notifies them that business accounts and business credit cards will be closed by March 31 and urges the missions to open accounts with other financial institutions. Personal accounts will not be affected, the letter says.
It does not provide any explanation for the decision.
Chase provided a copy of the letter to RFE/RL but a spokesman, Thomas Kelly, said the bank was not providing any additional comment.
The letter says the decision to close business accounts of the UN missions "does not reflect on your organization or how you have handled your account(s)."
While other U.S. banks provide services to the UN missions, Chase was the only one with a retail branch at UN headquarters.
There is speculation that a U.S. tightening of financial regulations to fight terrorism and money laundering are putting considerable constraints on U.S. banks' ability to deal with foreign entities. While before this year, only foreign transactions over $10,000 were required to be reported to U.S. federal authorities, starting this year all transactions with overseas clients, no matter how small, must be reported.
The closure of the Chase branch has already caused a commotion within diplomatic circles. While the larger UN missions, particularly those representing developed countries, are unlikely to be significantly affected by the change, some smaller missions rely entirely on Chase to handle their financial matters in the U.S.
Russia is one of the countries having business accounts with Chase. So are Kazakhstan, Tajikistan, and Turkmenistan. None of the representatives of those countries would comment on their missions’ financial status with Chase or how the closure of Chase's UN office and their business accounts with Chase will affect their activities.
There's a chance that UN diplomats may encounter similar resistance when trying to open accounts with other U.S. banks. The diplomatic immunity of UN missions could make it nigh impossible for banks to enforce the U.S. financial rules and regulations should a dispute arise.
On the other hand, as a host country the U.S. is obliged by the UN headquarters agreement of 1947 to facilitate the day-to-day activities of UN diplomatic missions without any hindrance.
The Chase closure is regarded seriously enough that the U.S.'s UN mission will hold a special meeting this week with UN ambassadors to discuss the situation.
For its part, Washington's UN mission has sent its own letter to other UN missions advising them to open accounts with other U.S. banks but acknowledging that they may have difficulty doing so. The letter also emphasizes that the U.S. government has no authority or influence over the business decisions of a private bank.
-- Nikola Krastev
JP Morgan Chase, one of the U.S. banks providing retail and business services to United Nations missions, will phase out operations of its UN branch at the end of March.
In a letter sent to all 192 UN member states, Chase notifies them that business accounts and business credit cards will be closed by March 31 and urges the missions to open accounts with other financial institutions. Personal accounts will not be affected, the letter says.
It does not provide any explanation for the decision.
Chase provided a copy of the letter to RFE/RL but a spokesman, Thomas Kelly, said the bank was not providing any additional comment.
The letter says the decision to close business accounts of the UN missions "does not reflect on your organization or how you have handled your account(s)."
While other U.S. banks provide services to the UN missions, Chase was the only one with a retail branch at UN headquarters.
There is speculation that a U.S. tightening of financial regulations to fight terrorism and money laundering are putting considerable constraints on U.S. banks' ability to deal with foreign entities. While before this year, only foreign transactions over $10,000 were required to be reported to U.S. federal authorities, starting this year all transactions with overseas clients, no matter how small, must be reported.
The closure of the Chase branch has already caused a commotion within diplomatic circles. While the larger UN missions, particularly those representing developed countries, are unlikely to be significantly affected by the change, some smaller missions rely entirely on Chase to handle their financial matters in the U.S.
Russia is one of the countries having business accounts with Chase. So are Kazakhstan, Tajikistan, and Turkmenistan. None of the representatives of those countries would comment on their missions’ financial status with Chase or how the closure of Chase's UN office and their business accounts with Chase will affect their activities.
There's a chance that UN diplomats may encounter similar resistance when trying to open accounts with other U.S. banks. The diplomatic immunity of UN missions could make it nigh impossible for banks to enforce the U.S. financial rules and regulations should a dispute arise.
On the other hand, as a host country the U.S. is obliged by the UN headquarters agreement of 1947 to facilitate the day-to-day activities of UN diplomatic missions without any hindrance.
The Chase closure is regarded seriously enough that the U.S.'s UN mission will hold a special meeting this week with UN ambassadors to discuss the situation.
For its part, Washington's UN mission has sent its own letter to other UN missions advising them to open accounts with other U.S. banks but acknowledging that they may have difficulty doing so. The letter also emphasizes that the U.S. government has no authority or influence over the business decisions of a private bank.
-- Nikola Krastev