Mukeshbhai Ambani was a happy man when HSBC gave a clean chit to him recently.

Forget about HSBC bank, the largest or second largest in the world, holding India’s loot. Shocking as it sounds it has been funding terrorists and if there is anything worse than this I am yet to know.

A US Senate report this Monday revealed how HSBC allowed Mexican drug money; Iranian terrorist money and even suspicious Russian money to enter the US and gain access to US dollar liquidity over the last couple of years.

The report, prepared by the Permanent Subcommittee on Investigations, and with support of Senators Carl Levin and Tom Coburn revealed how during a year-long investigation HSBC exposed the US financial system to “a wide array of money laundering, drug trafficking, and terrorist financing.” Can anything be worse?

HSBC’s Mexican affiliate channeled $7 billion into the US between 2007 and 2008 which included “proceeds from illegal drug sales in the United States.”

Strangely HSBC lamely acknowledged “in the past we have sometimes failed to meet the standards that regulators and customers expect.”

HSBC actively circumvented rules designed to “block transactions involving terrorists, drug lords, and rogue regimes.” In one case, “two HSBC affiliates sent nearly 25,000 transactions involving $19.4 billion through their HBUS [HSBC’s US affiliate] accounts over seven years without disclosing the transactions ’links to Iran.”

The two HSBC affiliates provided US dollar financing and services to banks in Saudi Arabia and Bangladesh that were tied to terrorist organizations, while also clearing $290 million in “travelers cheques” that benefited Russians “who claimed to be in the used car business.”

HSBC’s regulator Office of the Comptroller of the Currency (OCC) failed to take a single enforcement action against HSBC despite numerous violations by the international bank. Among them, not monitoring $60 trillion in wire transfer and account activity, a backlog of 17,000 unreviewed account alerts regarding potentially suspicious activity, and a failure to conduct anti-money laundering due diligence before opening accounts for HSBC affiliates.

Due to poor AML [anti-money laundering] controls, HSBC exposed the United States to stop illicit money. But what it did here was worse. It helped KAALA Indians to siphon off illgotten wealth.

Tragedy of it all is that it is difficult to punish HSBC or any bank for that matter with prevailing laws. For all practical purpose it will go unpunished unless the United States enacts a special law to punish HSBC.

Mukeshbhai should throw the clean chit away.


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