BBC reported on the 20th, citing relevant confidential documents, that HSBC in the United Kingdom still allowed customers to transfer tens of millions of dollars from the United States even though they knew they had engaged in “Ponzi schemes” and were fraudulent. The confidential document called “Suspicious Activity Report” stated that in 2013 and 2014, HSBC allowed fraudsters to transfer US$80 million (approximately RMB 540 million) to HSBC bank accounts in Hong Kong through its US operations.
Affected by this scandal, HSBC Holdings plunged in the Hong Kong stock market on Monday. HSBC Holdings fell 4.4% to 29.6 Hong Kong dollars in the Hong Kong stock market in the morning. In the afternoon, HSBC Holdings fell to a new low in the Hong Kong stock market. As of 15:44, it had fallen to 29.35 Hong Kong dollars, a record low since May 1995, and fell more than 5%.
The Hang Seng Index fell below 24,000 points at 15:29 in the afternoon, the first time since June 15, and it fell 1.86% during the day. In addition, the trend of European stocks was also quite weak. The Stoxx Europe 600 Index fell 1.7% at 15:44 in the afternoon and the banking sector fell 4.1%.
In fact, the above-mentioned HSBC scandal attracted people’s attention only after the confidential documents of the US Financial Crimes Enforcement Network Agency (FinCEN) were leaked on the 20th of this month.
On September 20th, more than 2,500 confidential documents of the Financial Crimes Enforcement Network Agency (FinCEN) were leaked by more than 2,500, involving approximately US$2 trillion in transactions. These documents expose the behavior of some international banks to allow criminals to transfer stolen money around the world and also expose how Russian oligarchs use banks to evade sanctions by Western countries.
According to a report by the BBC on the 21st, the leak of the FinCEN file is the latest in a series of leaks in the past five years. The content of the file exposed secret transactions, money laundering, and financial crimes.
These leaked reports included transactions that were deemed suspicious by the internal compliance department of financial institutions between 1999 and 2017, involving more than US$2 trillion in transactions. The International Federation of Investigative Journalists, which obtained these outflow reports, stated that these leaked reports are only a small part of the numerous reports submitted to FinCen by financial institutions. In these reports, the five banks that appear most frequently are HSBC, Standard Chartered, JP Morgan Chase, Deutsche Bank, and Bank of New York Mellon.
Reports show that these banks often transfer funds to companies registered in tax havens such as the British Virgin Islands and do not know who the ultimate owners of these accounts are. Foreign media reports also quoted some of the transactions mentioned in the report. For example, JPMorgan Chase provides services to individuals and corporate clients in Venezuela, Ukraine, and Malaysia who may engage in corruption. HSBC has assisted in fund transactions suspected of a Ponzi scheme. The bank assists Ukrainian billionaires in transactions related to funds.
In recent years, HSBC and Standard Chartered Bank have paid billions of dollars in fines for violating US sanctions against Iran and anti-money laundering regulations.
FinCEN will revise anti-money laundering regulations
In recent years, major banks have repeatedly been fined by the regulatory authorities for the transfer of available funds, but apparently the fines have not prevented these major banks from continuing to engage in these money laundering businesses. The regulatory authorities have also taken new actions in this regard.
Last week, the Financial Crimes Enforcement Network (FinCEN) announced that it will amend the financial sector’s anti-money laundering (AML) and counter-terrorism financing (CTF) rules. The announcement also pointed out that the Financial Regulatory Network will solicit public feedback on the upcoming regulatory proposals, which are designed to update and strengthen the rules for financial institution reporting and regulatory requirements.
This new policy is designed to respond to growing illegal financial threats such as money laundering, financing, and related crimes. At the same time, the new anti-money laundering regulations also aim to identify and combat illegal financial activities through strict record-keeping and risk assessment requirements. Regulators hope to strengthen the definition of “effective and reasonably designed anti-money laundering programs” in the Bank Secrecy Act (BSA) And requirements, the term currently has no clear and consistent definition in the current legislation.
FinCEN’s revised new anti-money laundering regulations will affect the compliance obligations of banks, credit unions, casinos, insurance companies, mutual funds, and futures, commodities, gem and precious metal traders or brokers.