Wednesday, April 25, 2007

BAWAG Admits Its Mistake

Playfuls.com

08:20 PM, April 23rd 2007

By Jack Thorpe

Austria's BAWAG bank admitted in a statement released Monday that it made a mistake when the accounts held by approximately 100 Cuban customers were cancelled.

"Some mistakes have been made, for which I apologize," Ewald Nowotny, the general director of BAWAG, said.

In December 2006 BAWAG, which is the fourth-largest bank in Austria, was bought by US-based Cerberus Capital Management for 3.2 billion euros and it is believed that following the US policy against Cuba BAWAG cancelled all accounts of its Cuban customers last week. The termination of the accounts was done "in anticipation of the reorganization of business relations in individual fields" following the take-over by Cerberus, Nowotny added. Nowotny denied the allegations saying the decision had been the management's alone, and had not been a reaction to pressure exerted by the new owners.

These actions triggered massive criticism from across the political spectrum in Austria and the bank’s management reassured that at the time of decision Cerberus was not officially in charge and the steps taken had been an effect of "the interaction of several legal spheres in an increasingly globalized world.

It is a known fact that the United States have been enforcing sanctions against Havana for almost 50 years now by the so-called Helm-Burton Act. This act prohibits American companies and their subsidiaries to have business relations with Cubans and it's speculated that business relations with customers from Iran, North Korea and several African countries will be severed as well.

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Cuba protests Austrian bank's decision to stop serving Cuban customers

The Associated Press

Published: April 25, 2007

VIENNA, Austria: Cuba on Wednesday protested the decision by an Austrian bank recently bought by a U.S. consortium to stop serving Cuban customers.

"For us, this action is unacceptable," Norma Goicochea Estenoz, Cuba's ambassador to Austria, told reporters at the Cuban Embassy.

BAWAG P.S.K., linked to the collapsed U.S. commodities broker Refco, was bought in December by a consortium headed by New York-based private equity company Cerberus Capital Management. Since U.S. law prohibits not only American businesses but also their subsidiaries abroad from conducting any commerce with Cuban nationals, the bank said earlier this month it had terminated its relationship with its Cuban customers.

The consortium won a bid to buy BAWAG in mid-December. EU regulators cleared the sale at the end of February and the takeover is expected to be completed next month.

Goicochea Estenoz, speaking in Spanish through a translator, said the embassy had been in touch with several Austrian ministries and the speaker of parliament and had been told that the matter would be looked into.

The ambassador said BAWAG's director general, Ewald Nowotny, had asked to meet with her. Earlier this week, Austrian media quoted Nowotny as saying that the bank had made some mistakes in dealing with the issue.

A BAWAG spokesman said late last week that the bank wanted to seek special authorization from U.S. authorities to resume serving Cuban nationals.

Goicochea Estenoz was accompanied at the news conference by Lissethe Grana, whose brother has been affected by the decision. Grana said BAWAG told her brother to close his account by April 20, declined to give him an extension and also asked him to pay part of a fee.

"This is an insult," said Grana, a travel agent who holds both Austrian and Cuban citizenship and who said she has lived in Austria for almost 13 years.

Goicochea Estenoz said she was not aware of other banks in Europe taking such measures against Cuban clients.

"Yes, BAWAG is making history ... it hurts us," she said.

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