HSBC 'to pay' $1.9bn money-laundering fine
Europe's biggest bank reportedly faces fines from US regulators over transfers linked to Iran and Mexican drug cartels.
Last Modified: 11 Dec 2012 00:12
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HSBC will reportedly admit to violating the US Bank Secrecy Act and the Trading with the Enemy Act [AP]
Europe's biggest bank, HSBC, will reportedly pay $1.9bn to settle a money-laundering probe by authorities in the United States.
The probe of the British bank has focused on the transfer of billions of dollars on behalf of nations like Iran, which are under international sanctions, and the transfer of money through the US financial system from Mexican drug cartels.
According to a law enforcement official, HSBC will pay $1.25bn in forfeiture and $655m in civil penalties. The $1.25bn figure is the largest forfeiture ever in a case involving a bank.
Under what is known as a deferred prosecution agreement, the financial institution will be accused of violating the Bank Secrecy Act and the Trading With the Enemy Act.
"It's a huge slap on the wrist for HSBC, the biggest fine of its kind, and a warning to other banks that they can't do the same," Al Jazeera's Alan Fisher, reporting from Washington, DC, said.
The London-based bank said it was co-operating with investigations but that those discussions are confidential.
The law enforcement official said an announcement of the agreement could come as early as Tuesday.
'Violating Trading with the Enemy Act'
In July, the US Senate Permanent Subcommittee on Investigations released a report saying HSBC allowed clients to move shadowy funds from Mexico, Iran, the Cayman Islands, Saudi Arabia and Syria.
The same month, HSBC admitted to poor anti-laundering controls.
The reported settlement would resolve investigations by the US justice and treasury departments and other federal agencies, as well as the Manhattan district attorney.
As part of the HSBC settlement deal, it will admit to violating the Bank Secrecy Act and the Trading with the Enemy Act, the Wall Street Journal said, citing a government official.
In early November HSBC said it had increased the amount set aside for fines linked to money-laundering in the US to $1.5bn.
The report of the HSBC settlement came the same day the US Treasury announced that another British bank, Standard Chartered, would pay $327m to settle charges it violated US sanctions on Iran, Myanmar, Libya and Sudan.
For Standard Chartered, the fines from the Treasury and other US federal and local regulators brought to $667m the total it has been charged for sanctions violations.
