HSBC, the only British bank with a branch network in America, failed to properly staff its compliance department and wrongly designated Mexico as a “low-risk” country.
In one of the more damaging accusations, the report says HSBC resumed providing banking services to a Saudi Arabian bank despite speculation it had links to financing terrorism.
HSBC is also criticised by the committee for designating Mexico as “low-risk” despite the widespread use of the country’s banking system by drug cartels. The decision made it easier for money to be moved between HSBC’s affiliate bank in Mexico and its network in the US. Its Mexican bank should have been treated as a “high-risk correspondent client subject to enhanced due diligence and monitoring,” the report said.
The report also contained strong criticism of the Office of the Comptroller of the Currency, a top US bank regulator, saying the regulator failed to crack down on the bank despite multiple red flags, allowing money laundering issues "to accumulate into a massive problem".
A Caribbean bank formerly co-owned by Barclays has been targeted by US tax authorities seeking information...
