Handing over the report card

A couple of weeks ago a rather intriguing story hit the press, revealing that HSBC is trying to stop publication of a report on its AML effectiveness.  When the bank was hauled over the coals by the US authorities in 2012 over its laundering for Mexican drug cartels, it negotiated a deferred prosecution agreement.  As part of the DPA, HSBC agreed to install an independent monitor to provide quarterly updates on the bank’s AML efforts – a process that has not gone entirely swimmingly, with the monitor coming up against “combative” managers in HSBC.  Anyhoo, on 1 April 2015 the monitor’s first annual report was filed.  And now Hubert Moore, an HSBC customer, wants to have a look at it and has sent a request to Judge John Gleeson in New York to have it unsealed.

Putting aside the wisdom of wanting a read a thousand-page compliance document, should Mr Moore be given this access?  Both HSBC and the US Department of Justice think not, on the grounds that it would (a) make the monitor’s job more difficult, and (b) “provide criminals seeking to engage in activities such as money laundering or terrorist financing a road map for exploiting current weakness in the anti-money laundering and sanctions programme at HSBC and potentially other financial institutions”.

Tricky, isn’t it?  As a magistrate here in the UK, I work within the sentencing guidelines issued by the government.  These guidelines are entirely public, and frequently in court a solicitor – and sometimes even a defendant – will say, “According to your guidelines, your worships, you will see that this offence falls into category whatever and so attracts penalty whatever”.  On balance, is it right – and useful – for accused people to know exactly what is at stake when they plead?  The UK government obviously thinks so.

But this is slightly different, I’m minded to think.  (Can you hear the magistrate-speak in that?)  After all, if a museum, say, has a security audit done, it would be unwise to publish the report highlighting its weaknesses before it has put them right.  Afterwards, maybe, but not before.  And perhaps the same principle should be applied here: the HSBC monitoring reports should be published, but only once they have put everything right.  And if the courts were to set a deadline for that publication, it might be a useful incentive to get a wriggle on.

This entry was posted in AML, Money laundering and tagged , , , , , , , , . Bookmark the permalink.

2 Responses to Handing over the report card

  1. Richard Babbé says:

    The DPA makes a good read, but not quite as good as “Worm in the Blossom”.

  2. * blush * How kind of you – glad you enjoyed the book. Work is well underway on “Plank 4”, due out in October.
    Best wishes from Susan

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