HSBC passed money to “drug kingpins and rogue nations”
The US said “dangerous practices” at HSBC allowed the bank to pass money to “drug kingpins and rogue nations”, as it fined it $1.9bn (£1.2bn).
HSBC agreed the fine, the largest of its kind, earlier on Tuesday.
A US Senate investigation said the UK-based bank had been a conduit for drug barons and nations such as Iran against which it had sanctions, making it illegal to do business there.
HSBC admitted having poor money laundering controls and apologised.
Money laundering is the process of disguising the proceeds of crime so that the money cannot be linked to the wrongdoing.
US Assistant Attorney General Lanny Breuer said in a statement: “HSBC is being held accountable for stunning failures of oversight – and worse – that led the bank to permit narcotics traffickers and others to launder hundreds of millions of dollars through HSBC subsidiaries.
Another official said it was implicated in “wilful and dangerous” practices.
The settlement had been widely expected following a report by the US Senate, published earlier this year, that was heavily critical of HSBC’s money laundering controls.
The report alleged that:
- HSBC in the US had not treated its Mexican affiliate as high risk, despite the country’s money laundering and drug trafficking challenges
- The Mexican bank had transported $7bn in US bank notes to HSBC in the US, more than any other Mexican bank, but had not considered that to be suspicious
- It had circumvented US safeguards designed to block transactions involving terrorists drug lords and rogue states, including allowing 25,000 transactions over seven years without disclosing their links to Iran
- Providing US dollars and banking services to some banks in Saudi Arabia despite their links to terrorist financing
- In less than four years it had cleared $290m in “obviously suspicious” US travellers’ cheques for a Japanese bank, benefiting Russians who claimed to be in the used car business
The report suggested HSBC accounts in Mexico and the US were being used by drug barons to launder money.
BBC business editor Robert Peston said that as big as the $1.9bn penalty looks, it could have been much worse.
if you as a citizen did this..you would be in jail..for a long time..i dont see anyone going to jail here?
HSBC are banker filth who prey on us and use us and finance illegal schemes all over the world..our bastions of society are a disgrace..