Argentina’s financial crimes unit will fine the local branch of London-based bank HSBC some $1 million dollars for failing to report a money laundering case, as part of an investigation into the bank’s weak anti-money laundering controls.
As Clarin reports, the financial crime unit stated that HSBC would be fined for failing to report a suspicious transaction carried out in 2007. The case involved a client who moved five million pesos (about $941,530) into a bank account. The money was then extracted from the bank account over a month.
HSBC did not consider any of these transactions suspicious, even though the client involved had no declared assets and a monthly income that was officially reported as less than $3,000. The bank only reported the incident in 2010.
Argentina’s tax authority filed criminal charges against HSBC earlier this year. At the time, the agency head accused the bank of helping businesses evade taxes and launder up to $121 million.
Last year, the bank faced similar accusations in the US, after a Senate report found that the bank had enabled Mexican drug cartels to launder their proceeds. Organizations like the Sinaloa Cartel were reportedly able to purchase equipment such as turboprop aircraft via HSBC accounts. The bank eventually agreed to pay a $1.9 billion settlement.
InSight Crime Analysis
This is not the first time that HSBC has faced fines in Argentina. The financial crimes unit fined the bank $14 million last year, for failing to report several suspicious transactions that took place inside the country in 2008. This was followed by another $6 million fine in December 2012.
If Argentina’s courts apply further penalties to HSBC for allowing such irregular activity, the bank will face even tougher days ahead. Additionally, if the criminal case against the bank continues to move forward in Argentina, it would stand in sharp contrast to the US, where authorities refrained from prosecuting bank officials.