September 28, 2020

Transparency International calls for criminal investigation of HSBC by UK authorities

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Flickr_TransparencyInternational_A.M.Ahad_296 calls for criminal investigation of by authorities

Transparency International today called on authorities in the United Kingdom to begin a criminal investigation into HSBC in light of recent accusations against the bank.

HSBC’s private bank has been accused of facilitating money laundering and earned big profits handling secret accounts for arms dealers, dictators and blood diamond traffickers, according to material released by the International Consortium of Investigative Journalists.

“Multiple news outlets have shown how HSBC went out of its way to maintain bank accounts for well-known criminals and other corrupt people. The Swiss have acted on the available evidence: we do not see any reason why a criminal investigation should not also be immediately initiated by UK authorities,” said José Ugaz, chair of Transparency International.

In recent years, in a number of cases relating to money laundering and tax evasion, criminal investigations into HSBC have been initiated by Argentine, Brazilian, Swiss and United States authorities. However, there has been no such investigation in the UK, where HSBC is headquartered and is the country’s biggest bank as measured by assets.

MTI_-Balazs-Mohai-1The Swiss authorities have acted and it is surprising that those in the UK have not. Transparency International urges cooperation between the Swiss and UK authorities.

HSBC has made progress in its anti-corruption procedures in the past two years; to prove its commitment, Transparency International would expect full cooperation from the company in any investigation and prosecution.

The HSBC affair is the latest in a long line of banking scandals, most of which have resulted in penalties that have not demonstrably changed behaviour or culture. The recent ruling to imprison bankers in Iceland resulting from the 2008 financial crisis has been a rare example of individuals being held responsible.

The UK authorities must make a bold move against the corruption and abuse of the global banking system by the banks that they are responsible for regulating. HSBC is not the first bank to face such serious accusations, nor will it be the last, but it is imperative a strong message be sent that corruption is unacceptable in the banking sector and the ongoing string of scandals must be stopped.

Financial integrity is fundamental to the well-being of the global economy. Bankers and regulators have so far failed to demonstrate that they understand this simple fact and it is time they did so.

SOURCE: https://www.transparency.org/news/pressrelease/transparency_international_calls_for_criminal_investigation_of_hsbc_by_uk_a

Related release from Transparency International

Transparency International calls for global action to stop the money laundering merry-go-round

Transparency International calls on governments and their enforcement authorities across the world to combine forces to end money laundering impunity. These authorities should assign the highest priority to prosecuting individuals and banks when clear evidence exists of their involvement in illicit international financial transactions.

José Ugaz, Chairman of the Board of Directors of Transparency International, stated: “Evidence of money laundering abounds, but for the greatest part investigations have only resulted in corporate fines with almost no criminal prosecutions of individuals. Actions by national judicial authorities to end this criminal behaviour are largely absent.

“This lack of senior management accountability sends a signal to the corrupt individuals and corporations laundering cash, and to their banks, lawyers and other agents who assist them in their crimes, that in this area there is impunity. This is wrong.”

Transparency International calls for judicial authorities around the globe to enforce anti-money laundering regulations and pursue and prosecute those who flout the rules. Banks need to oversee their employees and enforce higher ethical standards, which have to be reflected in the tone from the top, the performance management system and remuneration.

Governments should introduce public registers of beneficial ownership information of companies to facilitate anti-money laundering due diligence by banks as well as anti-money laundering investigations.

Recent investigations in the US, UK and Switzerland in bank practices have put a spotlight on these issues.

“Transparency International will continue to vigorously campaign to unmask the corrupt and those who collude with them: the bankers, the accountants, the real estate brokers, the consultants and the other professional intermediaries who enable the corrupt to launder their ill-gotten cash into the mainstreams of the world’s financial system. Time behind bars for those who break the law, rather than settlements that shift the burden to shareholders, would signal a time to change,” said Ugaz.

Note:

Approximately 100,000 individuals and corporations held accounts at the Swiss branch of Europe’s largest bank, HSBC and investigations by the media have been found many to allegedly conceal funds for tax evasion and others to harbour the alleged proceeds of corruption.

UBS, one of the two largest banks in Switzerland, confirmed on February 10 that it is being investigated by US authorities into whether it helped Americans evade taxes.

The New York Times is publishing a series of reports on the use of shell companies to buy high value property in New York city. These shell companies have concealed the identity of the owners and the sources of their wealth, which in some cases allegedly is linked to corruption.

SOURCE: https://www.transparency.org/news/pressrelease/transparency_international_calls_for_global_action_to_stop_the_money_launde

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