HSBC’s Swiss bank concealed large sums of money for people facing allegations of serious wrongdoing, including drug-running, corruption and money laundering, leaked files reveal.

Despite being legally obliged since 1998 to make special checks on high-risk customers, the bank provided accounts for clients implicated in six notorious scandals in Africa, including Kenya’s biggest corruption case, blood diamond trading and several corrupt military sales.

HSBC also held assets for bankers accused of looting funds from former Soviet states, while alleged crimes by other account holders include bribery at Malta’s state oil company, cocaine smuggling from the Dominican Republic and the doping of professional cyclists in Spain.

The Swiss bank also held accounts for “politically exposed people” – defined as senior political figures or their relatives at heightened risk of involvement in corruption, money laundering, or avoiding international sanctions – with little evidence of any extra scrutiny of their activities.

The bank’s involvement varies from case to case, the files show. Sometimes, the secret accounts appear to have been directly used for allegedly corrupt transactions. In others, HSBC continued to provide banking services to individuals facing public allegations of wrongdoing. Other examples merely highlight how the secrecy of the Swiss banking system attracted people engaged in wrongdoing.

Presented with this evidence by the Guardian, HSBC now admits that after it purchased the Geneva bank in 1999 “too many … high-risk accounts were maintained” and the “compliance culture and standard of due diligence” were low.

The bank refused to discuss the details of individual clients, but said it had taken action to address the problems. It had closed the accounts of people who could not demonstrate compliance with tax obligations, stopped offering accounts in jurisdictions where proper due diligence was impossible and tightened up its “know your customer” and anti-money laundering procedures to “ensure a more complete consideration of a new client’s source of wealth”… see more

source: Guardian UK