US banks abbetting corrupt regimes, probe finds

The global bank HSBC may be running offshore accounts for central banks. According to a U.S. Senate investigation, an HSBC subsidiary in London called HSBC Equator Bank had a sister bank in the Bahamas. According to an internal e-mail, the bank told HSBC USA it had been providing offshore accounts to central banks for 20 years, because the banks wanted to avoid "Mareva" injunctions, legally enforceable orders to freeze funds. This was revealed by a report to be released Thursday by the Senate Subcommittee on Investigations. A subcommittee staff member who worked on the investigation said, "You have a central bank saying to their banker, I don't want to have to comply with a legally enforceable order so put me offshore. So they did." HSBC declined to confirm or deny the charge. HSBC told IPS, "HSBC takes compliance matters very seriously. HSBC's record demonstrates a commitment to vigorous enforcement and continuous enhancement of anti-money laundering policies and practices." It would not comment further. The committee's 350-page report of an investigation that lasted two years focuses on how U.S. banks, lawyers, real estate and escrow agents hide the origins of funds belonging to foreign government officials and other "politically exposed persons" (PEPS) who might be moving illicit cash.