HSBC: Active Non-Compliance of Anti-Money Laundering Standards
47,515 people are said to have been murdered from 2010 as a result of the Mexican drug war. (source: New York times). Others say the figure is closer to 60,000. Fear abounds and the latest news coming in states that the drug mafia has made deep inroads into the army, government machinery which the Mexican government is finding very hard to eradicate.
The drug lords of Mexico are so rich they are running a parallel government, with the power struggles between drug lords for territory that has led to massive loss of life and a complete destabilization of everyday life. These drug lords are so well heeled that they can pay any official off, and go about living spectacular lifestyles.
Mexico’ neighbor, USA, is battling with an errant player, which it has been warning for a while now. It has been trying to get this group to comply by its rules without much success. The group continues to throw up every other day clear violations, which they often get off by paying seemingly massive fines and continue to do what they promised they would change. It has now been revealed that members of this group have laundered money for what the United States considers rogue states like Iran, Libya or terrorist and drug organizations in Mexico or Saudi Arabia for instance. Greed far exceeds the pride of being a prestigious company.
HSBC, one of the leading British banks has been found yet again for blatantly breaking compliance standards by a Senate permanent sub-committee. The panel headed by Senator Carl Levin has expressed its deep reservations about HSBC meeting compliance standards given its poor track record on previous promises.
HSBC officials are making all the right noises about reorganizing its compliance structure and orienting itself towards adopting best standards.
The bank is accused of having shell operations in Cayman islands, where it provided a haven for drug money. Between 2007 and 2008, HSBC's Mexican arm moved $7 billion into the bank's U.S. operations, said the report by the U.S. Senate's Permanent Subcommittee on Investigations. (Source: Reuters).
In Mexico, the bank turned the other way, often flouting anti-money laundering rules set by the government. HSBC has been under the Mexican banking and securities commission eye from as early as 2002. The movement of large funds in and out of the US made them suspicious and HSBC has been the subject of an inquiry.
It has further emerged HSBC has been engaged in business in areas said to be clear hotspots for drug cartels, terrorism and tax avoiders.
ING and Wachovia have settled paying hefty fines in the past. HSBC could pay fines up to a billion. ING coughed up about 38% ($619million) of the 1.6 billion it is said to have laundered from 1990 to 2007, through US banks.
This content is for paid members only.
Join our membership for lifelong unlimited access to all our data science learning content and resources.