Buffalo, New York, Native Matt Lee, AP's Long-Serving U.S. Department State Correspondent, References M&T Bank During Briefing About Iran
/Although Buffalo, New York-Based M&T Bank Not Connected With Iran Discussion, Connectively With Matthew Lee, United States Department Of State Correspondent For New York, New York-Based Associated Press (AP), Served As Reference During Press Briefing At The United States Department Of State.
M&T Bank Did Host Operating Accounts For The Government Of The Republic Of Cuba Before Relinquishing Them Due To Burden Of OFAC Compliance.
United States Department of State
Washington DC
13 September 2023
Excerpts [Link To Complete Transcript]
Press Briefing With Mathew Miller, Spokesperson
[For Context, First Question Asked] MATTHEW LEE (ASSOCIATED PRESS): “I want to go back to the Iran stuff that you were talking about yesterday, and the assertion from the administration that billions of dollars in escrow accounts had been sent back or withdrawn by Iran during the previous administration without any restrictions at all. Do you have any more?
MR LEE: … at M&T Bank, right, and draw it down to zero. And you should be able to tell, or someone should be able to tell, if it was at zero or not, right? Why can’t you tell- I don’t understand.
MR MILLER: These are not accounts held in the United States.”
In 2015, the Obama-Biden Administration (2009-2017) authorized United States-based financial institutions to have correspondent accounts with Republic of Cuba government-operated financial institutions, but did not authorize Republic of Cuba government-operated financial institutions to have correspondent accounts with United States-based financial institutions. The regulations were managed by the Office of Foreign Assets Control (OFAC) of the United States Department of the Treasury.
In 2015, Pompano Beach, Florida-based Stonegate Bank (2017 assets approximately US$2.9 billion) acquired accounts for the Embassy of the Republic of Cuba in Washington, DC, and the Permanent Mission of the Republic of Cuba to the United Nations in New York after Buffalo, New York-based M&T Bank Corporation (2022 assets approximately US$200 billion) notified the embassy and mission that it would no longer provide services due to challenges with regulatory compliance for many accounts with embassies and missions.
Stonegate Bank in 2015 received a license from the OFAC for a correspondent account at Banco Internacional de Comercia SA (BICSA), a member of Republic of Cuba government-operated Grupo Nuevo Banca SA, created by Corporate Charter No. 49 in 1993 and commenced operation in 1994.
According to the Republic of Cuba, “Its [BICSA] main activity is ‘enterprises’ bank’ carried through its central services and five branches based in the country’s capital, Santiago de Cuba and Villa Clara. It records all transactions in real time providing its customers with card and remote banking services while it is working on developing other methods of electronic banking. Its institutional clients, national or foreign, receive a complete accounting and documentary service, while national entities also enjoy of significant volumes of credit facilities. Practically all sectors of the economy benefit from all this, such as that of agriculture, the food industry, the basic and light industries, transportation, aviation, fishing, construction, domestic and foreign trade, the iron and steel industry, sugar, informatics, communications and others with not only economic importance but also social, such as health, water supply, education, culture and sports. Credit policy followed by the Bank is dictated in a collegiate way by its Credit Committee on the basis of a strict analysis and control in loan making. The Bank counts on correspondents in the five continents, the majority are first class banks, mainly Europeans and Americans. Equity capital of shareholders (Grupo Nueva Banca with the biggest share and Bancholding), near the USD95 millions with a balance ranging from 550 to 600 millions, make sure the Bank has a strong solvency ratio.”
Without explanation the Obama-Biden Administration did not authorize BICSA under a license from the OFAC to have a correspondent account at Stonegate Bank, so Stonegate Bank routed transactions for approximately eighty (80) customers on a regular basis through Panama City, Panama-based Multibank (2019 assets approximately US$5 billion) which had dealings with the Republic of Cuba.
In 2017, Conway, Arkansas-based Home BancShares (2022 assets approximately US$22.8 billion) through its subsidiary Centennial Bank purchased Stonegate Bank. Stonegate Bank operations were absorbed into Centennial Bank.
On 16 June 2020, Bogota, Colombia-based Grupo Aval Acciones y Valores SA (2022 assets approximately US$90.1 billion) reported that “On May 25th, Banco de Bogotá, through its subsidiary Leasing Bogotá S.A. Panamá, acquired 96.6% of the ordinary shares of Multi Financial Group [Multibank]. As part of the acquisition process, MFG’s operation in Cuba was closed and as part of the transaction. Grupo Aval complies with OFAC regulations and doesn't have transactional relationships with Cuba.”
In June 2022, Elk Grove Village, Illinois-based Chicago, Illinois-based First American Bank (2022 assets approximately US$6 billion) acquired from Centennial Bank an operating account (and Republic of Cuba-focused branch personnel) for the Embassy of the Republic of Cuba in Washington, DC. First American Bank has since ceased managing the account for the Embassy of the Republic of Cuba. If BICSA is authorized by the OFAC to establish a correspondent account with First American Bank and if First American Bank were to establish a correspondent account with BICSA, there would be an opportunity for direct two-way fund transfers for authorized transactions (agricultural commodities, food products, healthcare products (medical equipment, medical instruments, medical supplies, pharmaceuticals, informational materials, travel (visa processing, overflight fees, landing fees, accommodation payments- Airbnb, etc.), remittances, and entrepreneurial activities (direct investment to and direct financing for privately-owned companies located in the Republic of Cuba, etc.). This same scenario would apply to almost any United States-based financial institution.
