The Commerce Department announced yesterday that the Bank America Corp., one of the nation’s largest banks, agreed, without admitting any wrongdoing, to pay a $108,000 fine stemming from charges it violated federal regulations banning aid to the Arab boycott of Israel.
The Department said the fine was the largest ever imposed on an American bank and the ninth penalty imposed for such an offense in the past 10 months. The Department said that, since October, 1981, 12 other banks have paid a total of $535,000 in fines, including $24,500 paid Monday by the Bank of New York.
The Commerce Department had charged that the Bank America International subsidiary handled eight letters of credit issued in banks in Middle East countries which boycott Israel. Federal law bans participation by American firms in the boycott of Israel.
A letter of credit is a bank document which guarantees an exporter payment for goods shipped. Officials said such a letter could help the anti-Israel boycott by requiring that the goods covered by the letter of credit did not come from Israel or that the ship carrying the goods had not stopped at an Israeli port.
The incidents charged against the Bank America occurred from January, 1980 through October, 1982. A bank spokesman said that “considering the volume of letters of credit that were handled during the period, it is possible inadvertent and unintentional processing errors could have been made.” The spokesman said the bank would comply with federal regulations on the boycott in the future.
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