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your argument might carry more credibility if the rest of the document did not go on to extensively document the backdrop against which this and similar decisio

your argument might carry more credibility if the rest of the document did not go on to extensively document the backdrop against which this and similar decisions were made. in fact, that's the entire point of this document.

rayiner 13y ago
There's nothing in the "backdrop" of the document that refutes retube's argument. All it does is suggest that HSBC wanted to avoid the cost and hassle of subjecting transactions in Mexico to a higher level of scrutiny than transactions in other countries. That's a weakness in a regulatory control, not a crime.
- justincormack 13y ago
  not dealing with the cost and hassle is a crime.
- milkshakes 13y ago
  I don't understand the point you are trying to make. The document outlines a pattern of decisions by high level HSBC executives -- ranging from individual transgressions such as simply falsifying or sanitizing otherwise illegal transactions, to more long-term choices, such as ignoring basically everyone else in the industry as you mentioned earlier, and systematically under-resourcing compliance departments -- that led the bank to appear to comply with AML laws and regulations when in reality it was flagrantly violating them. In fact, it is a crime to fail maintain an effective AML program if you are a bank, and HSBC does not dispute that they committed this crime. From the document, page 3: 7. The Department alleges, and HSBC Bank USA admits, that HSBC Bank USA’s conduct, as described herein, violated the BSA. Specifically, HSBC Bank USA violated Title 31, United States Code, Section 5318(h)(1), which makes it a crime to willfully fail to establish and maintain an effective AML program, and Title 31, United States Code, Section 5318(i)(1), which makes it a crime to willfully fail to establish due diligence for foreign correspondent accounts.
- csallen 13y ago
  Translated: "HSBC wanted to avoid the cost and hassle of complying with the law."
  - mike_hearn 13y ago
    Which is correct behaviour and what governments all ask banks to do, believe it or not. It's called the "risk based approach" in the AML jargon. The problem with AML laws is that they are so vague, it's impossible to ever really be sure you're in compliance. They turn banks into a privatised police force. How much effort should they make? Governments won't tell. They just say "be sensible about it". Banks hate this, as would you in their position, they want clarity about what to do, but governments don't want to give them a list of boxes to tick because they feel it'd be too slow and inflexible to keep up with criminals. See the problem? Banks invest VAST sums in AML compliance. They develop automated software to spot suspicious transactions, they have massive internal compliance departments, they ID verify all their customers. It's a huge, huge drain (which is passed on to all of us, of course). But how much is enough? As far as the Justice Department is concerned, there can never be enough. Whilst criminals exist, it must mean failures of compliance by banks.
    - csallen 13y ago
      I'm not saying that the laws aren't overly vague or in need of improvement. But classifying Mexico as a low-risk country despite KNOWING that it's high-risk was not an accidental misinterpretation of what was expected from them.

rayiner 13y ago

There's nothing in the "backdrop" of the document that refutes retube's argument. All it does is suggest that HSBC wanted to avoid the cost and hassle of subjecting transactions in Mexico to a higher level of scrutiny than transactions in other countries. That's a weakness in a regulatory control, not a crime.

justincormack 13y ago
not dealing with the cost and hassle is a crime.
milkshakes 13y ago
I don't understand the point you are trying to make. The document outlines a pattern of decisions by high level HSBC executives -- ranging from individual transgressions such as simply falsifying or sanitizing otherwise illegal transactions, to more long-term choices, such as ignoring basically everyone else in the industry as you mentioned earlier, and systematically under-resourcing compliance departments -- that led the bank to appear to comply with AML laws and regulations when in reality it was flagrantly violating them. In fact, it is a crime to fail maintain an effective AML program if you are a bank, and HSBC does not dispute that they committed this crime. From the document, page 3: 7. The Department alleges, and HSBC Bank USA admits, that HSBC Bank USA’s conduct, as described herein, violated the BSA. Specifically, HSBC Bank USA violated Title 31, United States Code, Section 5318(h)(1), which makes it a crime to willfully fail to establish and maintain an effective AML program, and Title 31, United States Code, Section 5318(i)(1), which makes it a crime to willfully fail to establish due diligence for foreign correspondent accounts.
csallen 13y ago
Translated: "HSBC wanted to avoid the cost and hassle of complying with the law."
- mike_hearn 13y ago
  Which is correct behaviour and what governments all ask banks to do, believe it or not. It's called the "risk based approach" in the AML jargon. The problem with AML laws is that they are so vague, it's impossible to ever really be sure you're in compliance. They turn banks into a privatised police force. How much effort should they make? Governments won't tell. They just say "be sensible about it". Banks hate this, as would you in their position, they want clarity about what to do, but governments don't want to give them a list of boxes to tick because they feel it'd be too slow and inflexible to keep up with criminals. See the problem? Banks invest VAST sums in AML compliance. They develop automated software to spot suspicious transactions, they have massive internal compliance departments, they ID verify all their customers. It's a huge, huge drain (which is passed on to all of us, of course). But how much is enough? As far as the Justice Department is concerned, there can never be enough. Whilst criminals exist, it must mean failures of compliance by banks.
  - csallen 13y ago
    I'm not saying that the laws aren't overly vague or in need of improvement. But classifying Mexico as a low-risk country despite KNOWING that it's high-risk was not an accidental misinterpretation of what was expected from them.