US banks close accounts of foreign missions

J P Morgan Chase and other US banks are closing down the bank accounts of scores of diplomatic missions and embassies here without giving any reason, angering foreign diplomats who are worried about how they will carry on their regular activities.

While no explanation has been offered, observers have suggested that these accounts are being closed because banks do not want the cost-burden of monitoring accounts for terrorist activity and money laundering.

Responding to whether the United Nations could intervene in the matter, UN spokesperson Martin Nesirky noted that Secretary-General Ban Ki-moon was "aware" of the situation but the problem had to be resolved between the bank and the concerned countries with mediation from the United States.

"I've mentioned that this is a matter for the Member States to take up with the host country, and they have been doing that," Nesirky told journalists. "I would urge you to speak to the United States Mission about what they may or may not be doing to help in this regard," he added.

On Thursday, State Patrick Kennedy, the US undersecretary of state for management, arrived at the UN to meet 150 diplomats and assess the various alternatives available.

Kennedy underlined that that the decisions to close diplomatic accounts were business decisions made by the banks, and both Secretary of State Hillary Clinton and Treasury Secretary Timothy Geithner were engaging with the banks to find a solution to the problem.

Meanwhile, diplomats of poorer countries of the UN are finding it difficult to open accounts in other banks. In September, Chase, which is the second largest bank in the US, sent out a letter informing their clients that their mission and embassy accounts would be closed by March 31.

Failure to find another bank will interfere with basic activities like paying bills and handing out staff salaries. It has also been suggested that the UN should close the space given to Chase Bank on its premises when the new building of the UN, which is currently under renovation, is ready.

Responding to whether the decision to terminate diplomatic accounts would have an impact on current talks between Chase and the UN about its new space, Nesirky said, "If there are discussions going on, I am not going to comment on this while those discussions are going on."