Money laundering

Money laundering[edit]

In both 2003 and 2010, U.S. regulators ordered HSBC to strengthen its anti-money laundering practices.^[151] In October 2010, the United States OCC issued a Cease and Desist Order requiring HSBC to strengthen multiple aspects of its Anti-Money Laundering (AML) program. The identified problems included a once massive backlog of over 17,000 alerts identifying suspicious activity, failure to file timely suspicious activity reports with U.S. law enforcement, failure to conduct any due diligence to assess risks to HSBC affiliates before opening correspondent accounts for them, a three-year failure by HBUS from mid-2006 to mid-2009 to conduct any AML of $15 billion in bulk cash transactions from those same HSBC affiliates, failure to monitor $60 trillion in annual wire transfers by customers in countries rated lower risk by HBUS, and inadequate and unqualified AML staffing, resources, and leadership. It was noted that HSBC fully cooperated with the Senate investigation.^[152]

In 2012, HSBC was fined by $14 million by Argentina for failure to report suspicious transactions in the country in 2008.^[153]

On 19 July 2012, India investigated alleged violation of safety compliance, in which Indian employees were believed to be involved.^[154] On 9 November 2012, Indian activist and politician Arvind Kejriwal said he had details of 700 Indian bank accounts hiding black money with a total value of ₹60 billion (US$750 million) with HSBC in Geneva.^[155] In June 2013, a media outlet in India did an undercover expose where HSBC officers were caught on camera agreeing to launder "black money." HSBC placed these employees on leave pending their own internal investigation.^[156]

In November 2012, it was reported that HSBC had set up offshore accounts in Jersey for suspected drug-dealers and other criminals, and that HM Revenue and Customs had launched an investigation following a whistle blower leaking details of £700 million allegedly held in HSBC accounts in the Crown dependency.^[157]

Following search warrants and raids beginning in January 2013, in mid-March 2013 Argentina's main taxing authority accused HSBC of using fake receipts and dummy accounts to facilitate money laundering and tax evasion.^{[158][159][160]}

In early February 2013, appearing before UK's Parliamentary Banking Standards Commission, CEO Stuart Gulliver acknowledged that the structure of the bank had been "not fit for purpose." He also stated, "Matters that should have been shared and escalated were not shared and escalated."^[161] HSBC has also been accused of laundering money for terrorist groups.^[161][162]

In June 2015, HSBC was fined by the Geneva authorities after an investigation into money laundering within its Swiss subsidiary. The fine was 40 million Swiss Francs.^[163]

In 2018, HSBC was fined 15 million rand by South Africa's central bank for weaknesses in its processes meant to detect money laundering and terrorism financing, though it also added that HSBC was not found to have facilitated any transactions involving money laundering or the financing of terrorism in South Africa.^[164]

In 2020, HSBC told AUSTRAC that it may have broken Australia's anti money laundering and counter-terrorism laws after allegedly failing to report thousands of transactions to AUSTRAC.^[165][166]

In July 2021, HSBC disclosed that in 2016 it discovered a suspected money laundering network that received $4.2 billion worth of payments which has raised questions over whether it disclosed this appropriately to US monitors as the bank was still under probation by U.S. authorities over anti-money laundering concerns.^[167][168]

In December 2021, HSBC was fined 64 million pounds ($85 million) by British regulators for failings in its anti-money laundering processes spanning eight years.^[169]

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