UNITED NATIONS: A United Nations spokesman said Tuesday that a major American bank's notice asking diplomatic missions accredited to the world body to close down their business accounts by the end of March was a matter between UN member states and the United States government.
No reason was given for the decision by JP Morgan Chase Bank, which has prompted strong protests from UN member sates, which have accounts in the bank. The UN Missions were informed of the decision demanding closure of their accounts by March 31 in a letter sent by bank. Additionally, all business credit cards will also be terminated by that date.
"We are aware of this decision, but this is something the member states (of the UN) should take up with the host government (the United States), UN Spokesman Matin Nesirky said when asked to comment on a report to that effect circulated by IPS (Inter-Press Service).
He said a US official was coming from Washington later this week to brief representatives of the UN Mission to the United Nations.
The letter warned that it "continues to reserve the right to close the accounts earlier, at any time, for any reason, without any notice," according to IPS.
A letter sent by the US Mission to the United Nations to the 191 member states pointedly refers to a "recent decision by large commercial banks (plural) to discontinue diplomatic or foreign government accounts."
The implication, according to the report, is that more than one commercial bank - besides Chase - may be trying to throw out all diplomatic business accounts, virtually blacklisting them.
An unnamed UN diplomat told IPS the decision was probably related to preventing money laundering and terrorism funding. "Chase Bank's decision to close down diplomatic accounts is most unhelpful," he was quoted as saying.
Even though it has been presented as a commercial decision, it leaves one wondering why they are doing it now, after so many years of assisting diplomatic missions, the diplomat said.
"Is it because of pressure from the host government's authorities? If so, why?" he asked
"This is not consistent with the obligations of the host country under the UN Headquarters agreement and they should do something about it before it gets out of hand," he added.
According the 1947 Headquarters Agreement, under which UN Headquarters was established in New York, "American authorities" are expected to "supply on equitable terms with the necessary public services", including telephone and telegraph facilities, to the United Nations and its member states.
"In case of any interruption or threatened interruption of any such services, the appropriate American authorities will consider the needs of the United Nations as being of equal importance with similar needs of essential agencies of the government of the United States, and will take steps accordingly, to ensure that the work of the United Nations is not prejudiced."
The Chase letter said, "We recommend that you open bank accounts with another financial institution and begin using them immediately in order to minimize any disruptions." .
The bank has, however, said that personal accounts of diplomats and delegates will not be subject to termination - at least not yet.
In a letter sent to all member states, the US Mission says it is aware that "the majority of the Permanent Missions in New York have for years been clients of JP Morgan Chase, and that the closure by the bank of this division means that the Mission's business accounts will likewise be closed by March 31."
The letter also says that some Missions "believe that they may experience difficulty in establishing accounts at other financial institutions in the New York area".
Absolving the host country of any responsibility, the letter says that JP Morgan Chase is a private sector bank and its decisions are made for "business reasons alone". But those reasons remain unstated.
"The government of the United States has no authority to force banks to continue to serve their customers or to open or close any accounts," it says.
"The authorities of the host country are in contact with JP Morgan Chase, as well as with other large commercial banks and alternate types of financial institutions, with a view to determining which entities are prepared to open accounts of the Missions to the United Nations, as well as for bilateral embassies in Washington DC and consular establishments around the United States that may need to make alternate banking arrangements in the wake of recent decision by large commercial banks to discontinue diplomatic or foreign government accounts."
There has been no comment from the Chase bank.
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