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 The warning from the Paris-based Financial Action Task Force came
in the wake of last month's indictment by the United States of nine
current and former FIFA officials and five business executives on a
series of corruption charges, including bribery, money laundering
and wire fraud.
With the U.S. investigation continuing to widen, and a separate
Swiss probe gearing up into whether there was corruption involved in
FIFA's awarding of the hosting rights to Russia and Qatar for the
next soccer World Cups in 2018 and 2022, the warning will add to
banks' concern about handling certain soccer accounts for
organizations and individuals.
Some European and U.S. banks had already stepped up scrutiny of
FIFA-related accounts and at least one said it had stopped handling
FIFA business for some time because of corruption allegations.
In a statement, that has now been removed from the agency's website,
FATF said "recent reports about alleged corruption and money
laundering activities on a large scale by several high-ranking FIFA
officials underscore how important it is that financial institutions
identify and monitor high-risk customers."
 It said that financial institutions "do not appear to have given a
sufficient amount of scrutiny to the financial activities of the
officials concerned, as many of these allegedly corruption-related
transfers passed through the international financial system
undetected."
FATF, whose members include the U.S., China, Brazil, Switzerland and
many other European countries, said that an "ongoing public debate
about the integrity of an entity should raise flags to financial
institutions. As a result they should treat customers that are
related to that entity as high risk customers."
Reuters was told about the statement, which appears to be dated June
16, by a European official with knowledge of the FIFA case. It can
be found through a Google search but is no longer accessible through
the FATF website.
FATF President Roger Wilkins told Reuters that he had taken the
decision to remove the statement from the agency's website over
concerns about its phrasing and a lack of concrete evidence to
support the claims.
"We don't want to interfere with ongoing investigations and the way
it's phrased could be misconstrued," he said, speaking by telephone
from Brisbane where FATF is meeting.
"We don't have any direct evidence that financial institutions have
done necessarily anything wrong or failed to do anything in relation
to these things."
NARCOTICS CONTROL REPORT
While the indictments were only issued on May 27, for many years
there has been widespread media coverage of alleged corruption at
FIFA and its regional affiliates, including several books published
on the question in the past nine years. There had also been news
reports about the FBI probe.
One question being asked in U.S. banking circles is whether banks
are acting quickly enough to flag activity once they have had
subpoenas for information about an account from the authorities,
said one source close to the industry.
Also in March, in a routine report on narcotics control that was
little noticed at the time, the U.S. State Department expressed
concern about how loopholes in Swiss law which affected FIFA had
created potential for corruption and money laundering. The report is
commonly used by U.S. banks to assess the risks associated with
foreign customers and correspondent banks.
 "Sports associations like the International Federation of
Association Football (FIFA) or the International Olympic Committee
are not businesses but associations. They do not pay taxes and, as
associations, are exempt from the Swiss anti-corruption legal
framework," the State Department said in the report. "The exception
provided to these entities makes them more vulnerable to money
laundering activity. The government should consider efforts to
change applicable laws with respect to these organizations, many of
which are suspected of corruption," it said in reference to the
Swiss government.
Despite all the warning signs, the indictment outlines dozens of
questionable transactions that banks in the U.S., Europe and
elsewhere allowed to go through, many of them in the past few years.
In the indictment, U.S. prosecutors say that the defendants and
their co-conspirators relied heavily on the U.S. banking system to
promote and conceal their schemes.
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The acting U.S. Attorney for the Eastern District of New York, Kelly
T. Currie, told a news conference when the indictments were
announced on May 27 that bank actions would be reviewed to see if
they knowingly facilitated bribes. The banks concerned have not been
accused of wrongdoing.
EARLIER WARNINGS
Still, some bank officials said they were concerned about how much
is being asked of them.
From the bank perspective, bribery and corruption payments "are hard
to find and follow" because "they often, but not always look like
legitimate business," said a senior compliance officer at a large
U.S. bank.
"We're doing what we do with all matters like this, looking at the
data we have — which is not complete in the context of a bribe — and
working with law enforcement to try to sort it out," the source
said.
One compliance officer at a British bank asked: "What, am I supposed
to research? Who the marketing guy is at each shoe company who makes
decisions about promotions tied to players and then watch his
account to see if he receives an extra $50,000? Where does it stop?"
Spokespeople for the four biggest U.S. banks JPMorgan Chase, Wells
Fargo, Bank of America and Citigroup all declined to comment on the
FATF statement, as did HSBC Holdings in London.
FATF has expressed concern in the past about soccer being a vehicle
for money laundering. In 2012, the group issued a warning that as
the sport grew, "the investment of money into the sector has
increased exponentially, and some of this has criminal connections."
"Despite the rapid growth and high-visibility of the football
sector, however, football's regulatory structure has not yet caught
up with these changes," FATF warned then.
Earlier, in July 2009, FATF issued a 40-page paper entitled "Money
Laundering through the Football Sector". The document said that
soccer faced numerous vulnerabilities to money laundering, including
a lack of professional management at various levels.
FATF said that it would be discussing the issue at its meeting in
Brisbane, including "whether any further standards or guidance are
necessary or whether the current standards are adequate if properly
applied."
The involvement of anti-money-laundering monitors in current
investigations of FIFA corruption was highlighted last week by
Michael Lauber, attorney general of Switzerland.
Lauber, who announced his FIFA investigation on the same day that
U.S. authorities revealed the indictments, told a news conference in
Berne last week that his investigators were examining sets of
suspicious transactions related to FIFA.
He said that these transactions included 104 banking relationships,
some of which involved multiple accounts, as well as 53 suspicious
transactions which had been flagged by Swiss financial institutions
to Switzerland's anti-money laundering agency, known as the
financial intelligence unit.
(Additional reporting by Karen Freifeld in New York and Matt Siegel
in Sydney; Editing by Martin Howell)
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