HSBC, Europe’s largest bank, has been fined $27.5m in Mexico for lax controls in its anti-money laundering systems, a week after a scathing US Senate report slammed the bank for letting clients shift funds from dangerous and secretive countries.
It is the biggest fine ever charged against a bank by the Mexico’s National Banking and Securities Commission (CNBV), the Mexican regulator said on Thursday.
CNBV levied the fine against the British banking giant due to its “non-compliance with anti-money laundering systems and controls” as well as its late reporting of 1,729 unusual transactions, failing to report 39 unusual transactions, and 21 administrative failures.
The Mexican fine is separate from any settlement the bank might reach with the US department of justice. That could run to as much as $1bn, analysts have estimated, based on a record $619m fine that ING bank agreed in June to pay to settle similar claims.
Last week, a US Senate panel alleged that HSBC acted as a financier to clients routing funds from the world’s most dangerous places, including Mexico, Iran and Syria, doing regular business in areas tied to drug cartels, terrorist funding and tax cheats.
The report slammed a “pervasively polluted” culture at the bank and said between 2007 and 2008, HSBC’s Mexican operations moved $7bn into the bank’s US operations.
HSBC ignored risks in doing business in countries like Mexico, where drug trafficking is rife, the report said.