Millennium Post

US lawmakers lash HSBC over money laundering

US lawmakers accused the global bank HSBC of opening the doors of the financial system to terrorists, drug dealers and money launderers, ahead of a hard-hitting report.

A Senate committee has found the London-based lender had allowed affiliates in countries such as Mexico, Saudi Arabia and Bangladesh to move billions of dollars in suspect funds into the United States without adequate controls.

‘In an age of international terrorism, drug violence in our streets... and organised crime, stopping illicit money flows that support those atrocities is a national security imperative,’ Senator Carl Levin said.

‘HSBC used its US bank as a gateway into the US financial system for some HSBC affiliates around the world to provide US dollar services to clients while playing fast and loose with US banking rules,’ his statement said.

‘If an international bank won't police its own affiliates to stop illicit money, the regulatory agencies should consider whether to revoke the charter of the US bank being used to aid and abet that illicit money,’ he warned.

HSBC's US affiliate had no immediate reaction to advance copies of the report, but the bank's parent firm HSBC Holdings said last week that it would apologise to lawmakers at a Senate hearing on Tuesday into the findings.

When the full 330-word report will be released, bank executives will say ‘unacceptable behavior’ slipped through HSBC monitoring systems, according to an internal memo quoted by Dow Jones Newswires.

Under the slogan ‘The World's Local Bank’, the network that began life as the Hong Kong and Shanghai Banking Corporation provides US dollars to HSBC banks in many countries under a procedure known as ‘correspondent banking’.

‘The Mexican affiliate transported 7 billion in physical US dollars to HBUS from 2007 to 2008... raising red flags that the volume of dollars included proceeds from illegal drug sales in the United States,’ the report said.
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