HSBC told to improve anti-money laundering controls

By Christine Duhaime | October 7th, 2010

HSBC Bank USA, N.A., has been ordered to improve its compliance with U.S. anti-money laundering laws. Under a Consent Order entered into with the U.S. Office of the Comptroller of the Currency (OCC) and the Federal Reserve, HSBC must correct anti-money laundering problems identified by the OCC and bring itself into compliance with the Bank Secrecy Act (BSA) and other U.S. anti-money laundering measures. The OCC found that HSBC’s compliance program had deficiencies with respect to suspicious activity reporting, monitoring of bulk cash purchases and international funds transfers, customer due diligence concerning its foreign affiliates, and risk assessments involving politically exposed persons.


The OCC has ordered HSBC to:

  • establish a compliance committee to monitor and coordinate HSBC’s adherence to the Consent Order;
  • prepare and implement an action plan to meet the Consent Order requirements;
  • hire a qualified permanent anti-money laundering compliance officer and a qualified permanent BSA officer within 15 days;
  • hire an independent anti-money laundering consultant to review HSBC’s compliance program within 10 days;
  • implement an effective anti-money laundering compliance program within 90 days;
  • develop a management information system and a plan to identify, monitor and manage BSA risks, including information with respect to PEPs;
  • draft and implement appropriate policies and procedures for gathering customer due diligence and enhanced customer due diligence information for bank accounts. The policies must, at a minimum, have methodologies for assigning risk levels, the identification of correspondent accounts and identification of PEPs;
  • devise policies to monitor wire transfers;
  • develop and maintain a written compliance program for the timely review and disposition of suspicious activity alerts and filing of suspicious activity reports. HSBC must also hire an independent anti-money laundering consultant to report on its compliance with this requirement specifically;
  • hire one or more independent anti-money laundering consultants who have expertise in foreign correspondent account activity to conduct an independent review of account and transaction activity;
  • establish controls for remote deposit capture use by foreign correspondent customers;
  • develop and implement a comprehensive anti-money laundering training program for operational and supervisory personnel; and
  • develop and maintain an effective program to audit HSBC’s BSA & anti-money laundering compliance program.
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