Specifically, the FIB has learned of several incidents where offers of trade financing, commercial lending or asset-backed lending were made against false financial instruments such as Letters of Credit, Standby Letters of Credit, and Bank Guarantees.
Banking regulations in Anjouan have become complicated and unpredictable following a series of conflicts internal to Anjouan financial authorities. Officals at these agencies have been accused of issuing inappropriate licences to offshore banks. It is highly probable that these offshore banks do not have sufficient assets to support the issue of certain financial instruments.
Attempts by the FIB to clarify who has the authority to issue bank licences in the area have failed. Jon Merrett, the FIB’s Assistant Director stated: “A number of people on Anjouan claim to have the authority to issue bank licences, but their credibility remains heavily suspect.”
The credibility of the Anjouan banking industry has been further undermined by one discredited bank that succeeded in having its details registered in a leading business directory. The bank, which is well known to the FIB, was able to get the listing after producing financial statements and testaments of good practice.
A number of the transactions resulting from the directory listing have since been called into question. The business directory owners responded quickly to remove the listing, but it is feared that there may be many other victims who have yet to realise that their trades or loans may have no substance.
According to FIB research, the bank that managed to get itself registered in the business directory is said to have been granted a licence in 2000 and have 38 employees. Since 2003, the FIB has received numerous reports that this institution issued fraudulent, worthless Letters of Credit and Bank Guarantees, often for several millions of dollars. A number of new complaints were reported to the FIB this summer. Based on these reports, the FIB is currently investigating this bank on behalf of several companies.
Mr Merrett noted, “The bank in question does not appear to have a physical location. The address stated to be in Ireland is not registered. A second Anjouan bank that had its licence revoked in 2003 is still issuing illegal documents and has recently negotiated a deal with two North Korean banks to set up another offshore institution.”
Mr Merrett added, “Given the current uncertainty in this region, it is advisable that anyone having dealings with an Anjouan registered banking entity or any financial transaction connected with the island take immediate steps to verify the worth of the financial instruments involved and the credibility of the institutions or individuals they are transacting with.”