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Bank to pay record money-laundering fine

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Bank found to be moving money in violation of sanctions.

The British-based Hong Kong and Shanghai Banking Corporation (HSBC) has been fined €1.9 billion as part of a settlement following a money-laundering probe by U.S. authorities. The investigation revealed the bank moved billions of dollars on the behalf of blacklisted groups such as Iran and Mexican drug cartels.

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Highlights

By Catholic Online (NEWS CONSORTIUM)
Catholic Online (https://www.catholic.org)
12/11/2012 (1 decade ago)

Published in Business & Economics

Keywords: HSBC, bank, money-laundering, Iran, drug cartels

WASHINGTON, DC (Catholic Online) - Following the investigation by the U.S. Department of Justice, HSBC admitted there had been a breakdown of controls and will now pay a forfeiture of $1.25 billion and $655 in civil penalties to the U.S. government.

This is the largest such forfeiture in history from a bank to the U.S. government.

According to authorities, HSBC handled money on behalf of clients working for Mexican drug cartels as well as moving money between Iran, Syria, Saudi Arabia, and the Cayman Islands. Moving those monies was prohibited by both U.S. and British law.

Iran, in particular, is under tight sanctions to discourage further development of its suspected nuclear weapons program. The sanctions imposed by the international community have effectively crippled that nation's economy, forcing its government to find more creative, and sometimes illegal means of transacting business sin international markets.

"We accept responsibility for our past mistakes. We have said we are profoundly sorry for them, and we do so again. The HSBC of today is a fundamentally different organisation from the one that made those mistakes," Stuart Gulliver, the bank's CEO said in a statement released on Tuesday.

HSBC is also expected to reach a settlement with British authorities for the same offense.

Meanwhile, Standard Chartered, another British bank is under investigation. According to the US Treasury, Standard Chartered will pay $327 million to settle charges leveled against it concerning money transfers between Iran, Myanmar, Libya, and Sudan.

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