Cross-border banking faulted for laxness. (international correspondent banking procedures)

A U.S. government seizure of $7.6 million from a Marine Midland Banks Inc. account has observers questioning whether international correspondent banking procedures are adequate to comply with federal rules designed to thwart money laundering.

Federal prosecutors in the Southern District of New York seized the money last month from a HongkongBank Panama correspondent account held at a Marine Midland branch in New York. Both banks are units of HSBC Holdings PLC, based in Hong Kong.

The U.S. attorney's office for the district said much of the money was proceeds of drug sales by Columbian cartels.

Bank Countersuing

Marine Midland has filed a countersuit …