Money Laundering.

The Global Problem

What is Money Laundering?

What is Money Laundering?

Money laundering is the process by which criminals attempt to hide and disguise the true origin and ownership of the proceeds of their criminal activities. The term Money Laundering is also used in relation to the financing of terrorist activity (where the funds may, or may not, originate from crime).*

Kidnapp ing Gambli ng Robbery and Fraud White Collar Crimes (including Insider Trading and Securities offences) Extortion

Criminal Activities Drug

Trafficking Bribery / Corruption Counterfeiting and Forgery Tax Evasion Serious Crime or All Crimes?

Organise d Crime

Prostituti on Smuggling
(arms, people, goods)

HSBC in Money Laundering Scandal

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The top executives including the CEO of HSBC Holdings plc (HBC) are set to face a tough inquiry by the congressional committee for their alleged involvement in money laundering during the period 20042010. Moreover, the representatives of the regulatory authority Comptroller of the Currency are also summoned for the judicial inquiry for their negligence. This reflects the U.S. governments constant efforts to restrain funding that were made available for anti-social activities. After year-long investigation into banks compliance with anti-money laundering rules, the subcommittee has accused the bank of failing to meet those rules. This could possibly result in hefty penalties, amounting around a billion, for HSBC. Apart from the senatorial committee, the Department of Justice and the Office of Foreign Asset Control are also investigating the bank regarding the same.

The investigation revealed substantial lapses in the bank's anti-money laundering compliance. This resulted into a worldwide displacement of funds from riskier nations through the bank. Controversial transactions pertaining to its Iranian clientele and the illegal narcotics trade in Mexico have drawn maximum attention.

The U.S. and the European Union is seeking to curb Irans various contentious projects. As a result, it has been trying to stop funding made available to the Iranian government by keeping a tab on the countrys banking activities. Moreover, the U.S. is trying to curb drugs trade in Mexico. Consequently, HSBCs carelessness regarding the money laundering rules has not gone down very well with the American government.

Other Banks Involved in the Scandal Earlier this year, the U.S. government held Netherlands-based ING Groep NV (ING) responsible for transferring billions of dollars through the American financial system to nations that were economically restricted by the U.S. As a result, ING bank ended up paying $619 million in penalties. Moreover, Wachovia bank, acquired by Wells Fargo & Company (WFC) in 2008, was accused of facilitating funds transfer related to Mexican Drug cartel. It ended up paying $160 million as compensation.

HSBC profit drops after money laundering fine.

HSBC paid nearly $2 billion last year to settle a moneylaundering case brought by U.S. officials that dealt with illicit drug money from Mexico. It paid another $1.4 billion fine in the U.K. for improperly selling financial products to customers and also wrote down the value of its own debt by $5.2 billion. The company's shares down nearly 3 percent to 7.06 pounds in early trading in London.

Presented by Jinkal Soni Roll no.163