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Thursday Nov 28, 2024
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LONDON (Reuters): HSBC has been fined 64 million pounds ($ 85 million) by British regulators for failings in its anti-money laundering processes spanning eight years.
The Financial Conduct Authority (FCA) said it had found that three key parts of HSBC's transaction monitoring systems in Britain showed serious weaknesses over a period from 31 March 2010 to 31 March 2018.
The fine comes amid a renewed crackdown by the regulator on money laundering failures.
HSBC'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.
The FCA said HSBC 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.
The bank was also found to have had inappropriate testing and did not check the accuracy and completeness of data in monitoring systems.
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.
HSBC also failed to detect a customer imprisoned for smuggling cigarettes into the UK and ordered to pay 1.2 million pounds by the HMRC tax office, where the bank missed “a sustained period of unusual activity,” the FCA said.
“These failings are unacceptable and exposed the bank and community to avoidable risks, especially as the remediation took such a long time,” said FCA Executive Director Mark Steward.
HSBC did not dispute the findings, resulting in its penalty being reduced from 91 million pounds, the regulator said.
“We are pleased to resolve this matter, which relates to HSBC's legacy anti-money laundering systems and controls in the UK,” a HSBC spokesperson said in a statement.
“HSBC is deeply committed to combating financial crime and protecting the integrity of the global financial system.” The bank has had to tighten up its money-laundering controls globally after a string of past scandals.
In 2012 it had to pay a $ 1.9 billion fine to US regulators for serving as a middleman for Mexican drug cartels and was monitored for five years. The FCA said its fine did not relate to the US action.
