MEXICO CITY — The Mexican government warned global bank HSBC about weaknesses in its money-laundering rules starting in 2002, a top regulator said after the financial conglomerate was accused of allowing drug cartels to access the U.S. financial system.
Mexican regulators had warned HSBC officials in Mexico and Britain about “administrative” errors but “at no point established that the bank might be complicit in criminal activity” related to Mexico’s notorious drug cartels, National Banking and Securities Commission head Guillermo Babatz said July 17.
Speaking to local radio, Babatz said regulators convinced HSBC to stop accepting U.S. dollars in 2009 and in 2010 imposed countrywide currency restrictions that resulted in a 75% decrease in the export of dollars by Mexican banks.
In a 330-page report, the U.S. Senate found the lender allowed affiliates in countries such as Mexico, Saudi Arabia and Bangladesh to move billions of dollars in suspect funds into the United States without adequate controls.
The report said HSBC’s Mexican affiliate “transported US$7.0 billion in physical US dollars to [HSBC US unit] HBUS from 2007 to 2008... raising red flags that the volume of dollars included proceeds from illegal drug sales in the United States.”
HSBC apologized July 17 for failing to apply anti-laundering rules and a senior executive resigned, as U.S. lawmakers accused the global bank of giving Iran, terrorists and drug dealers access to America’s financial system.
[AFP, 18/07/2012; Milenio.com.mx (Mexico), 18/07/2012]