As the old saying goes, you play, you pay…
HSBC fined for Cuba, other transactions
The British bank HSBC will pay $1.26 billion to settle U.S. charges of laundering Mexican drug money and another $665 million for violating sanctions on Cuba, Iran, Libya, Sudan and Burma, U.S. authorities announced Tuesday.
The Cuba violations appear to stem mostly from the HSBC Mexico subsidiary’s handling of U.S. dollar transactions to and from the island and agreement to hold dollar accounts for Cuban clients.
Documents in the case filed in U.S. court in Brooklyn Tuesday showed the bulk of the settlement, $1.2 billion, was to avoid four felony counts of willfully failing to maintain an effective anti-money laundering program in its Mexico operations.
HSBC officials in Mexico facilitated the laundering of at least $881 million in drug profits and “‘failed to adequately monitor” more than $9.4 billion in transfers from 2006 to 2010, according to announcements by the Departments of Justice and Treasury.
“HSBC is being held accountable for stunning failures of oversight — and worse — that led the bank to permit narcotics traffickers and others to launder hundreds of millions of dollars … and to facilitate hundreds of millions more in transactions with sanctioned countries,” declared Assistant Attorney General Lanny Breuer.
The bank willfully allowed $660 million in forbidden transactions involving Cuba and the other countries to pass through U.S. financial institutions from the mid-1990s to 2006, the court documents noted.
HSBC “followed instructions from sanctioned entities such as Iran, Cuba, Sudan, Libya and Burma, to omit their names from U.S. dollar payment messages sent to HSBC Bank USA and other financial institutions located in the United States,” the documents added.
Those payments violated U.S. sanctions under the International Emergency Economic Powers Act, the Trading With the Enemy Act and the U.S. embargo. Cuba, Iran, Syria and Sudan also are on the sanctions list of countries that support international terrorism.
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