In 2012, Hsbc paid $1.9 billion to pay charges against the U.S. Department of Justice for money laundering and sanctions violations. Earlier this year, David Bagley, then chief Compliance Officer, resigned amid a Senate hearing on HSBC`s misconduct. There is no doubt that HSBC has also invested money in hiring new compliance and risk management professionals. From 2012 to 2013, the Bank increased this specialized staff to 1,750; In 2014, the bank ended to reach a target of 7,000 employees. Nevertheless, observers say that the quality of the staff is as important as the quantity. RELEVANT CONSIDERATIONS The following is the result of the lawsuit agreement between HSBC and the U.S. Department of Justice, which was postponed in 2012. It explains the Bank`s promised improvements in compliance. The parties to HSBC have taken the following corrective action, are taken and/or are still being complied with: due to their failures in the AML and program deficiencies, HSBC North America and hsbc Bank USA have recovered deferred compensation (bonuses) for a number of their most senior AML and compliance officials, including the Chief Compliance Officer, the Director General of the AML and the Chief Executive Officer. HSBC Bank USA has reorganized its AML division to strengthen its reporting lines and increase its status within the institute as a whole by separating the legal and compliance divisions; require the Director of the AML to report directly to the Chief Compliance Officer; provided that the Director of the MRSA regularly corrects the Board of Directors and management directly through its Banksecrecy Act and anti-money laundering program. The bank has revised its KYC program and now treats HSBC Group Affiliates as a third party subject to the same due diligence as all other customers.
HSBC Bank USA has implemented a new method of risk assessment for customers, based on a multi-faceted approach that balances the following factors: the country in which the customer is located, the products and services used by the customer, the structure of the client`s legal entity, as well as the type of client and business. The Bank left 109 correspondence for risk reasons. The bank has a new automated monitoring system that oversees any transfer of funds through HSBC Bank USA. The system also tracks the author, sender and beneficiary of a bank transfer, allowing HSBC Bank USA to consider its client`s client. The HSBC Group has simplified its control structure, so that the entire organization is aimed at four global companies, five regional regions and 10 global functions. This allows HSBC Group to better manage its business and communication and better understand and address risks around the world. Since January 2011, HSBC Group has begun to apply a more consistent global approach to risk, selling 42 companies and withdrawing from nine countries. All HSBC Group subsidiaries will meet at least U.S. anti-money laundering standards. HSBC Group`s Compliance Officer has received direct oversight from every compliance officer around the world, so responsibility and escalation are now directly paid to HSBC Group Compliance.
Source: Ministry of Justice.