HSBC exposed US and possibly India to terror funding
"HSBC used its US bank as a gateway into the US financial system for some HSBC affiliates around the world to provide US dollar services to clients while playing fast and loose with US banking rules," Senator Carl Levin, the Chairman of the subcommittee, said following the release of the investigation report in this regard.
According to the report, the Mexican affiliate of HSBC transported USD 7 billion in physical US dollars to HSB-US from 2007 to 2008, outstripping other Mexican banks, even one twice its size, raising red flags that the volume of dollars included proceeds from illegal drug sales in the US.
The investigations found that HSBC, with its headquarters in London, allowed affiliates in countries such as Mexico, Saudi Arabia and Bangladesh to move billions of dollars in suspect funds into the US without adequate controls.
According to the report running into 340 pages, HSBC in 2009 authorised its affiliate to supply Indian rupees to Saudi Arabia's Al Rajhi Bank, which, the report said, has links to financing terrorism.
"From 2007 to 2010, HBUS (HSBC-USA) continued to supply, through its London branch, hundreds of millions of US dollars to Al Rajhi Bank in Saudi Arabia.