Bankers and financial services providers engage personal responsibility in transactions

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In my professional capacity as Attorney and Counselor at Law in the State of New York (US), in 2016 and as a member of the Banking Committee in the Business Law Section of the New York State Bar Association (NYSBA), I participated in and contributed to the preparation of a Comment Letter in conjunction with members of the American Bankers’ Association (ABA) to the Governor or the State of New York.

The purpose of that Comment Letter was to underscore our concerns as they applied to proposed new banking rules on transaction monitoring, as applied to, among other things, personal bankers’ liability in daily transactions for their customers and clients which, as proposed, I penned would introduce strict liability on bankers.

The rule as passed excludes personal liability on bankers and instead imposes a new annual certification requirement for transaction monitoring by a compliance officer and is properly integrated in Banking and Business law practices in New York, the US and they apply to all regulated and non-regulated financial institutions who operate in New York (therefore all overseen by the New York State Department of Financial Services), hence including all financial institutions who act as correspondence banks.

The wide-ranging effect of this rule includes, but is not limited to, its application to all countries with banks and financial institutions globally who either operate directly from New York, or who use New York-based banks or financial institutions for their cross-border transactions. And that means, that banks in countries like Dominica and the wider Caribbean, France (the EU) and the UK (among others),are directly affected by this rule.

In conclusion and as a consequence, having regard to the severe mandatory transaction monitoring requirements, banks/bankers/financial service providers who intervene by providing any assistance (advice, document preparation, solutions, etc.) may, axiomatically, be facilitating prohibited acts of intervention in economic transactions thereby engaging in activity which is criminalized in the State of New York and the US, and as such, in the country of intervention/facilitation. Thus, these financial players in the country/countries of intervention who engage in prohibited activities face, among other things, reputational risks, institutional risks and, even, the risk of losing their correspondence banking relationships or, worse, the risk of being locked out of the international banking system.

Marcia B. Moulon, Esq., LLB (Hons), LLM (IP), LEC, EFB

Attorney and Counselor at Law (NY, US) and Avocat (France, EU & Europe, Attorney at Law (Dominica, OECS & CARICOM), Attorney at Law (Barbados, admitted)