HSBC fined $85 million for UK anti-money laundering failings

HSBC fined $85 million for anti-money laundering failings
HSBC fined $85 million for anti-money laundering failings   -   Copyright  Thomson Reuters 2021   -  
By Reuters

<div> <p>By Iain Withers</p> <p><span class="caps">LONDON</span> – <span class="caps">HSBC</span> has been fined 64 million pounds ($85 million) by British regulators for failings in its anti-money laundering processes spanning eight years.</p> <p>The Financial Conduct Authority (<span class="caps">FCA</span>) said it had found that three key parts of <span class="caps">HSBC</span>’s transaction monitoring systems in Britain showed serious weaknesses over a period from March 31, 2010 to March 31, 2018.</p> <p>The fine comes amid a renewed crackdown by the regulator on money laundering failures. </p> <p>On Monday, <span class="caps">HSBC</span>’s domestic rival NatWest was fined 265 million pounds by a British court for failing to prevent the laundering of nearly 400 million pounds, some of it deposited at a branch in bin bags.</p> <p>The <span class="caps">FCA</span> said <span class="caps">HSBC</span> had made a string of failings, including inadequate monitoring of money laundering and terrorist financing scenarios until 2014, and poor risk assessment of “new scenarios” after 2016.</p> <p>The bank was also found to have had inappropriate testing and did not check the accuracy and completeness of data in monitoring systems.</p> <p>Among the shortcomings identified – which were specific to the UK – the bank failed to spot suspicious activity on the account of a construction director who also played a leading role in a criminal gang trying to steal millions of pounds by setting up fake companies.</p> <p><span class="caps">HSBC</span> also failed to detect a customer imprisoned for smuggling cigarettes into the UK and ordered to pay 1.2 million pounds by the <span class="caps">HMRC</span> tax office, where the bank missed “a sustained period of unusual activity,” the <span class="caps">FCA</span> said.</p> <p>“These failings are unacceptable and exposed the bank and community to avoidable risks, especially as the remediation took such a long time,” said Mark Steward, executive director at the <span class="caps">FCA</span>.</p> <p><span class="caps">HSBC</span> did not dispute the findings, resulting in its penalty being reduced from 91 million pounds, the regulator said. </p> <p>“We are pleased to resolve this matter, which relates to <span class="caps">HSBC</span>’s legacy anti-money laundering systems and controls in the UK,” a <span class="caps">HSBC</span> spokesperson said in a statement.</p> <p>“<span class="caps">HSBC</span> is deeply committed to combating financial crime and protecting the integrity of the global financial system.” </p> <p>The bank has had to tighten up its money-laundering controls globally after a string of past scandals. </p> <p>In 2012 it had to pay a $1.9 billion fine to U.S. regulators for serving as a middleman for Mexican drug cartels, and was monitored for five years. The <span class="caps">FCA</span> said its fine did not relate to the U.S. action. </p> <p>($1 = 0.7509 pounds)</p> <p/> </div>