To quote a US Senate investigation report, UK-based bank had been a conduit for “drug kingpins and rogue nations”. 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.
As explained by BBC,
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.
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