HSBC must reassess self-governing processes and strengthen compliance
US Senate investigations into HSBC reveal poor anti-money laundering controls, business with banks linked to terrorism, and ignoring of sanctions against Iran. July 18, 2012 | Magessan RajGlobal banking entity HSBC has come under fire from the United States Senate Permanent Subcommittee on Investigations in a recently published report accusing the bank of lax money laundering controls, which has led to movement of large volumes of money by organised criminals, drug cartels and terrorist groups. The product of a year-long investigation by the Senate subcommittee, the report showed HSBC USA (HBUS) allowing partner HSBC banks in countries with weak fraud and laundering controls to move billions through its books. Between 2007 and 2008, HSBC Mexico transacted $7 billion in cash though HBUS, a sum Mexican law enforcement officials have confirmed could only be reached “only if they included drug proceeds.” The report further stated that HSBC’s Mexico unit also had high profile clients with links to drug trafficking. Among other issues, the Senate report also highlighted HSBC’s extensive work relationship with Saudi Arabia’s Al Rajhi Bank, with some of the bank’s owners alleged to have been associated with terrorism financing. HBUS was also found to have facilitated 25,000 questionable payments involving Iran between 2001 and 2007 despite US sanctions. More appallingly, HSBC executives were said to have advised Iran financial institutions on how to evade regulations. "In an age of international terrorism, drug violence in our streets, and organised crime, stopping illicit money flows that support those atrocities is a national security imperative. HSBC used its US bank as a gateway into the US financial system for some HSBC affiliates around the world to provide US dollar services to clients while playing fast and loose with US banking rules," said Senator Carl Levin, chairman of the subcommittee. Levin also warned that if HSBC won’t police its own affiliates to stop illicit money, then regulatory bodies should consider revoking the charter of HBUS, which allegedly aided in the money laundering process. With the ... Please login to read the complete article. If you already have an account, you can login now or subscribe/register.
Categories: Regulation, Risk and Regulationriskregulation,Risk and Regulation, Regulation,Risk and Regulation, Keywords:HSBC, HBUS, US Senate Permanent Subcommittee On Investigations, Al Rajhi Bank, OCC, Senator Carl Levin HSBC, HBUS, US Senate Permanent Subcommittee on Investigations, Al Rajhi Bank, OCC, Senator Carl Levin
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