A couple of readers have commented in the past days that they are surprised that my blog is not all about HSBC, and so I thought I should explain my approach to this story (and others like it). In the world of money laundering, there is no shortage of the use of the three A words: accusation, allegation and apparently. And it’s not that I am frightened of being sued for libel, as I am smart enough to deploy the A words myself. But from a purely practical perspective I think that it is hard enough for MLROs to persuade their colleagues to adjust their behaviour in response to facts, let alone expecting them to change what they do whenever an allegation is made. (Despite the great strides made by technology, I am told that tinkering with the risk analysis mechanism of most firms is akin to making the Queen Mary change course.) And so, fascinating though it is to read the development of the HSBC story, I will reserve my interpretation of it all until the end – when we know who did what, when and why.
For those of you tracking the HSBC story, these appear to be the facts so far (although do note that I am relying mainly on the Beeb for these which – given recent revelations – may not be the wisest course):
- In July 2012, HSBC set aside $700 million to meet potential fines in the US for failures in its AML/CFT regime
- On 5 November 2012, the bank set aside a further $800 million to cover those fines, and announced a fall in quarterly profits
- A whistleblower supplied HM Revenue and Customs with a list of more than 4,000 British customers of HSBC in Jersey, alleging tax evasion; HMRC has confirmed that it has “received the data and we are studying it”
- On 9 November, HSBC confirmed that it is looking into allegations that criminals have used HSBC accounts in Jersey to launder money, saying in a statement: “Clamping down on those who try to cheat the system through evading taxes and over-claiming benefits is a top priority for us, and we value the information we receive from the public and business community.”
I remember being a teenager in Singapore and asking my father about bank accounts. “When you’re older,” he said, “We’ll get you one at the Honkers and Shankers – best place in town.” For the record (in case you’re listening, HMRC), we didn’t.