Today, HSBC added $800 million to the money it has set aside to cover US fines for money laundering, bringing the total amount that the bank has set aside for this issue to $1.5 billion. If the fine was of this level – and today HSBC warned that it could be even larger – it would make it one of the largest ever imposed on a bank.
The fine is a result of revelations in a July report of the US Senate Permanent Subcommittee on Investigations. According to the chair of the US Senate Subcommittee, HSBC’s ‘pervasively polluted’ culture allowed money launderers, drug dealers and suspected terrorists to move their money through the US financial system. For example, lax controls allowed Mexican drug cartels to move billions of dollars into the US, and an HSBC subsidiary helped a Saudi bank linked to al-Qaida to move money into the US.
Global Witness has consistently highlighted the reluctance of major banks to turn away suspect funds. “The only way to prevent banks like HSBC from facilitating money laundering is if the punishment fits the crime,” said Global Witness campaigner Rosie Sharpe. Three steps need to be taken.
- “Senior bankers need to be held legally responsible for their banks’ money laundering performance. In the most egregious cases, they should face jail and at the very least senior bankers’ bonuses should be clawed back,” said Sharpe. Lord Green was appointed HSBC chief executive in 2003 and chairman in 2006, and is now the UK Trade Minister. “We estimate that Lord Green pocketed more than £25 million in bonuses and shares during his time at HSBC, despite the fact that the bank’s own criteria for awarding bonuses is meant to take into account adherence to ethical standards; he should return this money,” said Sharpe.
- The US Treasury must require banks to identify and verify the ultimate owner of all bank accounts. US Congress should pass the bipartisan Incorporation Transparency and Law Enforcement Assistance Act to stop criminals from misusing American shell companies to hide their identities to launder dirty money through the financial system.
- HSBC must commission an external audit to look into how well it is managing money laundering risk. It must then publish the results.
For comment, please contact
- Rosie Sharpe in London on 020 7492 5854, 07803 733781 or [email protected]
- Stefanie Ostfeld in Washington DC on +1 202 577 5858 or [email protected]
 Figures from HSBC Holdings plc’s annual reports. The value of the shares is listed as ‘face value’ which could be higher than expected value.