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A new scandal affects the banking sector: Several banks have allegedly handled large sums of money, allegedly illicit, during the last 20 years. As reported by Reuters, the news comes from US media such as Buzzfeed based on some confidential documents presented by banks to the United States government.
According to media reports, the accusations are based on suspicious activity reports (HE – “suspicious activity reports“In English) submitted by some banks and other financial companies to the Financial Crimes Enforcement Network (FinCen) of the United States Department of the Treasury.
The SARs, reportedly over 2,100, have come into the hands of BuzzFeed News, in turn he has shared them with himInternational Consortium of Investigative Journalists (ICIJ) and other news organizations.
The ICIJ reported that the files contain information on transactions totaling more than $ 2 trillionconducted between 1999 and 2017, and the internal compliance departments of financial institutions have identified them as suspects. The SAR himself are not necessarily proof of wrongdoing, and the ICIJ specified that the leaked documents are only a small part of the reports submitted to FinCEN.
The names of the banks included in the report.
In total, there are five international banks appear more frequently in these documents: HSBC Holdings Plc, JPMorgan Chase & Co, Deutsche Bank AG, Standard Chartered Plc and Bank of New York Mellon Corp.
|These data are not representative of all reports received from the US Department of the Treasury Financial Crime Enforcement Network. The 1,943 SARs on which this data is based cover transactions between 1999 and 2017. Source: ICIJ|
The list also includes Barclays, Bank of America, China Investment Corporation, Wells Fargo, Citigroup, and Société Générale.
Potential Violation Reports provide us with key information that speaks to a extensive international effort in the fight against money laundering and related crimes carried out first by the banks themselves. However, the table presented in the report also shows us a system under stress, with insufficient resources and overloaded, which would allow large amounts of illicit funds to circulate through the banking system.
A bank has a maximum of 60 days to submit RAS after the transaction detection date to report, according to the Treasury Department Designated Office. The ICIJ report notes that in some cases banks did not report suspicious transactions until after years of conducting them.
These reports also show that banks have often transferred funds to companies registered in offshore tax havens, such as the British Virgin Islands, without knowing the name of the account holder.
Among the types of transactions reported in the report, the funds disbursed by JPMorgan in favor of potentially corrupt individuals and societies in Venezuela, Ukraine and Malaysia; money from a Ponzi scheme run by HSBC; funds linked to a Ukrainian billionaire moved by Deutsche Bank.
«I hope that these results stimulate urgent action by policy makers to implement the necessary reforms.Said Tim Adams, CEO of the Institute of International Finance business group. “As noted in today’s reports, the impacts of financial crime are felt beyond the financial sector alone – it poses serious threats to society as a whole.».
The banks’ response
HSBC
In response to Reuters:
«All information provided by ICIJ is historical“. Since 2012«HSBC has embarked on a multi-year journey to review its ability to combat financial crime in more than 60 jurisdictions.».
Standard chartered
In response to Reuters:
«We take our responsibility to fight financial crime very seriously and have invested heavily in our compliance programs.».
BNY Mellon
In response to Reuters:
«We fully comply with all applicable laws and regulations and assist authorities in the important work they do.».
JPMorgan
On a note:
The bank said it had been dedicated “thousands of people and hundreds of millions of dollars for this important work». «We have played a leadership role in anti-money laundering reform».
German bank
On a note:
The ICIJ refers to “a series of historical problems». «We have dedicated significant resources to strengthening our controls and we are very focused on meeting our responsibilities and obligations.».
