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Money transfers put Arab International Bank in the spotlight.

CAIRO: A senior official at the Arab International Bank, which operates outside the jurisdiction of the Central Bank of Egypt (CBE), said Tuesday that the bank saw large amounts of money transferred out of the country before January 25, according to several reports.

This was before the CBE closed banks nationwide for a week as a result of the ongoing mass protests. The unnamed official however denied that significant transfers had taken place during the current week starting Sunday, when bank reopened.

Speaking to independent daily Al-Shorouk, the official said Egyptian law does not allow the prevention of money transfers unless by court order.

"We are unable to calculate the value of those transfers specifically at this time, since they enjoy a high degree of confidentiality, but the precise amounts are known to the the central bank," Al-Shorouk cited the official as saying.

Established by an International Treaty in 1974, and managed by former Prime Minister Atef Ebeid, the official said that Arab International Bank is regarded as a haven for businesses and businessmen seeking accounts of a more secretive nature and a means to safely transfer funds.

He claims that the bank deals with senior Egyptian businessmen who have large accounts with the bank as well as with the major institutions and individuals within the state apparatus.

"Its license is special as it does not come from the Central Bank, but it is a legal license, and I don't think that it is not under the influence of the CBE, I'm sure the CBE knows what is happening in the bank," said Essam El-Mallakh, chairman of Lafferty Egypt.

Commenting about the supposed transfer of funds from the bank, he pointed out that "any bank in Egypt is allowed to make transfers anyway so there is nothing suspicious or unusual about the bank's actions."

According to the bank's website, by virtue of the treaty, the bank enjoys certain privileges in the territories of the member states (shareholders) including exemption from laws regulating banks, credit, exchange control, statutory auditing requirements, public institutions, public companies and joint stock companies.

The bank's main shareholders include the Arab Republic of Egypt, Socialist People's Libyan Arab Jamahiriya and the Abu Dhabi Investment Authority owning 30 percent, 30 percent and 25 percent, respectively.

The bank enjoys immunity from all forms of nationalization and seizure of shares in and deposits with the bank, and documents, records and files are inviolable and immune to judicial, administrative and accounting control and inspection rules and laws.

The bank has the right to confidentiality of customers' accounts except if they are subject to judicial or administrative restraining orders, and exempt from taxes of any kind on its funds, profits, dividends and all its activities and different transactions, as well as being exempt from taxation and any obligations for the payment, withholding or collection of any tax or duty, which may be imposed on its customers.

"They are taking advantage of this special license and these privileges to encourage people to keep their money here in Egypt, instead of keeping it abroad, so this is not necessarily a bad thing," Mallakh said.

The only official allowed to comment on this issue was not available for comment at press time.

Daily NewsEgypt 2011

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Publication:Daily News Egypt (Egypt)
Geographic Code:7EGYP
Date:Feb 9, 2011
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