The U.S. Department of the Treasury announced this week a collective settlement with HSBC Bank, reached by the Financial Crimes Enforcement Network (FinCEN), the Office of the Comptroller of the Currency (OCC), and the Office of Foreign Assets Control (OFAC), as part of a combined federal, local, and international government action. It was the largest bank settlement regarding the Bank Secrecy Act (BSA) and sanctions in U.S. history, and is more than $1.9 billion dollars in total. In FinCEN’s assessment of civil money penalty, the agency determined that the bank willfully violated the BSA by:
(1) lacking an effective anti-money laundering program reasonably designed to manage risks of money laundering and other illicit activity;
(2) failing to conduct due diligence on certain foreign correspondent accounts; and
(3) failing to detect and adequately report evidence of money laundering and other illicit activity.
Additional information is on the Department of Justice webpage. Financial institutions, including credit unions, are encouraged to review the settlement materials to understand the problem areas with HSBC, and ensure that their BSA and OFAC procedures are compliant with legal requirements.