LONDON, Dec 17 (Reuters) – HSBC has been fined 64 million kilos ($85 million) by British regulators for failings in its anti-money laundering processes spanning eight years.
The Monetary Conduct Authority (FCA) mentioned it had discovered that three key components of HSBC’s transaction monitoring methods in Britain confirmed severe weaknesses over a interval from March 31, 2010 to March 31, 2018.
The nice comes amid a renewed crackdown by the regulator on cash laundering failures.
On Monday, HSBC’s home rival NatWest was fined 265 million kilos by a British courtroom for failing to forestall the laundering of almost 400 million kilos, a few of it deposited at a department in bin luggage.
The FCA mentioned HSBC had made a string of failings, together with insufficient monitoring of cash laundering and terrorist financing eventualities till 2014, and poor threat evaluation of “new eventualities” after 2016.
The financial institution was additionally discovered to have had inappropriate testing and didn’t examine the accuracy and completeness of knowledge in monitoring methods.
Among the many shortcomings recognized – which had been particular to the UK – the financial institution failed to identify suspicious exercise on the account of a development director who additionally performed a number one function in a prison gang attempting to steal thousands and thousands of kilos by establishing pretend firms.
HSBC additionally did not detect a buyer imprisoned for smuggling cigarettes into the UK and ordered to pay 1.2 million kilos by the HMRC tax workplace, the place the financial institution missed “a sustained interval of bizarre exercise,” the FCA mentioned.
“These failings are unacceptable and uncovered the financial institution and neighborhood to avoidable dangers, particularly because the remediation took such a very long time,” mentioned Mark Steward, government director on the FCA.
HSBC didn’t dispute the findings, leading to its penalty being decreased from 91 million kilos, the regulator mentioned.
“We’re happy to resolve this matter, which pertains to HSBC’s legacy anti-money laundering methods and controls within the UK,” a HSBC spokesperson mentioned in an announcement.
“HSBC is deeply dedicated to combating monetary crime and defending the integrity of the worldwide monetary system.”
The financial institution has needed to tighten up its money-laundering controls globally after a string of previous scandals.
In 2012 it needed to pay a $1.9 billion nice to U.S. regulators for serving as a intermediary for Mexican drug cartels, and was monitored for 5 years. The FCA mentioned its nice didn’t relate to the U.S. motion.
($1 = 0.7509 kilos)
Reporting by Iain Withers Modifying by Rachel Armstrong, Jan Harvey and Mark Potter