HSBC’s Swiss private banking arm breached money-laundering guidelines by failing to hold out satisfactory checks on the high-risk accounts of two politically uncovered people, Switzerland’s banking regulator has discovered.
HSBC Private Bank (Suisse) has been banned from taking up any new high-risk clients till it has accomplished a full assessment of its enterprise relationships, Switzerland’s Financial Market Supervisory Authority (Finma) said.
The watchdog discovered that the financial institution had operated two high-risk enterprise relationships the place it had failed to hold out an satisfactory test of both the origins, goal or background of the belongings concerned.
Quite a few high-risk transactions have been insufficiently clarified and documented, making it unimaginable to determine their official nature. They have been carried out between 2002 and 2015 and totalled greater than $300m (£236m, €279m). The funds, which originated from a authorities establishment, have been transferred from Lebanon to Switzerland and, often after a short while, flowed again to different accounts in Lebanon.
HSBC stated it could enchantment towards the choice. It stated: “We acknowledge the matters raised by Finma, which are historic. HSBC takes its anti-money-laundering obligations very seriously including complying with all laws and regulations in every market we operate in. As we plan to appeal the decision it would be inappropriate to comment further.”
Finma, which opened enforcement proceedings towards HSBC in December 2021, stated it had “breached its obligations in the prevention of money laundering in connection with two politically exposed persons and thereby seriously violated financial market law”.
The regulator stated that till the measures had been applied in full, the financial institution could not enter into any new enterprise relationships with politically uncovered individuals. It added that the financial institution had cooperated with Finma.
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The watchdog has ordered the financial institution to assessment all its high-risk enterprise relationships and enterprise relationships with politically uncovered individuals. It should additionally test the proper categorisation of the dangers introduced by different clients. An audit agent will monitor the implementation of those measures on web site, and report back to Finma.