HSBC Allegedly Allowed Money Laundering Through U.S. System
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A U.S. Senate investigation report reveals HSBC may have allowed money laundering from five separate countries into the U.S. financial system.


(Image Source: Bloomberg )   BY LOGAN TITTLE   A U.S. Senate report released Monday accuses the international bank HSBC of acting as a financier to some of the world’s most dangerous criminals in five separate countries—allegedly helping launder money linked to drug cartels and terrorism. BBC has more.   “In the years of 2007 and 2008 $7 billion in cash was moved from HSBC’s Mexican affiliate into the United States.”   The committee’s report called HSBC’s culture “pervasively polluted” for nearly a decade. According to the report also accused the company of ignoring the risks of doing business with countries perpetuating high rates of illegal activity.   “...the regulator failed to crack down on the bank despite multiple red flags, allowing money laundering issues ‘to accumulate into a massive problem’. The failings and lax controls inside HSBC included an inability to properly monitor $15 billion in bulk cash transactions... inadequate staffing and high turnover in the bank's compliance units...”   And a financial analyst tells Al Jazeera —he’s not surprised one bit.   “When you look closely at all the major international banks, they will run into compliance issues all over the world...”   The investigation reveals that with its lax controls, HSBC created a gateway for drug cartels and terrorists a to the U.S. financial system. Businessweek notes an example of one incident.   “HSBC ignored links to terrorist financing among its customer banks, including Riyadh, Saudi Arabia-based Al Rajhi Bank, which had ties to terrorist groups through its owners...Internal documents show HSBC decided to cut ties with the bank before reversing itself under pressure from Al Rajhi, which received shipments of $1 billion in cash from HSBC’s U.S. operation between 2006 and 2010[.]”   But a writer for the New York Times says highlighting HSBC may not be the end of the inquiry, noting the report also went after the Office of Comptroller of the Currency—the regulators of the regulators— for also ignoring warning signs. All of this raises some questions.   “Are regulators and therefore governments themselves complicit (at best) in the corruption that seems to riddle the global financial system; and at what point is the capitalist system itself called into question? To what extent are these scandals the result of the system’s own values?”   The Washington Post reports HSBC executives and officials from the Office of Comptroller of the Currency will face stiff questioning Tuesday during a hearing on Capitol Hill.