Article 25 of the Vienna Convention on Diplomatic Relations requires a receiving state to "accord full facilities for the performance of the functions" of a diplomatic mission. However, in September 2010, J.P. Morgan Chase, which provides banking services to many foreign diplomatic missions in Washington and New York and to some foreign governments, advised these clients that it would cease to serve them at the end of March 2011. In November 2010, the Bank of America reportedly cut off several accounts held by Angola's embassy in Washington. Other major banks reportedly intend to cease serving foreign missions. The banks have not explained their decisions. However, U.S. and foreign officials speculate that they reflect the monitoring costs and risk exposure associated with assuring compliance with U.S. laws and regulations aimed at money laundering and terrorism. (1)
In January 2010, Undersecretary of State Patrick Kennedy and a senior official of the U.S. Department of the Treasury met with representatives of about one hundred foreign missions in New York to discuss the issue. The following is a substantial excerpt from Kennedy's subsequent press conference:
Reporter: The diplomats coming out ... are giving us the sense that this is really dire for them, that it kind of undermines our operations. What can the U.S. do about it?
Under Secretary Kennedy: Well, obviously, any entity--governmental, private--has to have a bank in these days in order to do their business....Secretary Clinton and Secretary Geithner are personally engaged in working on this issue, and we heard their concerns.... [W]e have offered some suggestions on what alternative approaches they might take to obtain additional banking services. And we will continue to work with them and we will continue to work with the banking industry as the host nation.
Under Secretary Kennedy: We've made clear that there is a United States interest in working with embassies in Washington and ... with missions to the United Nations in New York. But remember, unlike in many countries, banks in the United States are private entities. They are government-regulated, but they are not government-directed. And therefore banks in the United States, and in other countries as well, but not in every country, make decisions on the basis of business cases.
And if a bank decides to withdraw from a line of business that is not because the bank is saying that the Embassy of Xanadu or the Mission of Shangri...