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The American's case was that HSBC frequently circumvented the rules designed to prevent dealings with Burma, North Korea and Iran. That they did not disclose

The American's case was that HSBC frequently circumvented the rules designed to prevent dealings with Burma, North Korea and Iran. That they did not disclose tens of thousands of sensitive transactions when they should have. That when setting up banks in Mexico they marked them as low risk when they should be marked as high. That their Japanese branch accepted huge blocks of sequentially numbered travellers cheques that originated from Russia without applying any scrutiny. Is all of the above just 'moving money for remittances firms'? Or is it the US govs propaganda, reprinted by the BBC? Your comment just seems winding and lacking logic. First you argue that HSBC didn't really do anything wrong and then that the US gov didn't even want to prosecute them because they knew the consequences would be 'apocalyptic'. If these things are both true then why did HSBC settle out of court? Why did they publicly appologise? Why not just see the case through to save face and $1.9 billion.

sievebrain 10y ago
The payments in question were legal at the time: they were from countries that did not have sanctions against Iran to Iran. The Americans took a novel position in that case: that because the payments were denominated in dollars and were processed by computers in New York, American sanctions should apply to foreign payments. They then proceeded to punish HSBC for "evading sanctions" that didn't actually exist. It did achieve one thing though: it sent a powerful message that US law is in fact international law. Saying "Mexican banks should have been high risk instead of low risk" is the kind of subjective judgement call that highlighst my entire point. Maybe the high risk category was reserved for places like Congo or Nigeria or Pakistan, and Mexico - being a relatively stable state that engages in heavy trade with America - did not justify the same level of scrutiny as those. My logic is very simple. The laws are so vague that any kind of activity can be retroactively labelled as 'suspicious' and thus illegal. But that is not the rule of law. Your final paragraph shows you didn't understand what I wrote at all. HSBC is absolutely guilty of violating AML laws, as are all other banks, and if they went to court then a whole lot of bankers would have gone to prison for a long time ... just for engaging in the business of banking. This is not in the best interests of society because we then might find ourselves without banks, and neat though such a world might seem, we'd need an alternative first. The public apology was a part of the plea bargain struck with the US Gov. They were forced to do it. You'd do the same if the alternative was spending the rest of your life rotting in jail.

sievebrain 10y ago

The payments in question were legal at the time: they were from countries that did not have sanctions against Iran to Iran. The Americans took a novel position in that case: that because the payments were denominated in dollars and were processed by computers in New York, American sanctions should apply to foreign payments. They then proceeded to punish HSBC for "evading sanctions" that didn't actually exist. It did achieve one thing though: it sent a powerful message that US law is in fact international law. Saying "Mexican banks should have been high risk instead of low risk" is the kind of subjective judgement call that highlighst my entire point. Maybe the high risk category was reserved for places like Congo or Nigeria or Pakistan, and Mexico - being a relatively stable state that engages in heavy trade with America - did not justify the same level of scrutiny as those. My logic is very simple. The laws are so vague that any kind of activity can be retroactively labelled as 'suspicious' and thus illegal. But that is not the rule of law. Your final paragraph shows you didn't understand what I wrote at all. HSBC is absolutely guilty of violating AML laws, as are all other banks, and if they went to court then a whole lot of bankers would have gone to prison for a long time ... just for engaging in the business of banking. This is not in the best interests of society because we then might find ourselves without banks, and neat though such a world might seem, we'd need an alternative first. The public apology was a part of the plea bargain struck with the US Gov. They were forced to do it. You'd do the same if the alternative was spending the rest of your life rotting in jail.