Money Laundering

Money Laundering

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Introduction

There are millions of dollars made illegally and the intention of concealing this act is one of the objectives of the parties involved in such kind of acts. There is therefore need to institute anti-money laundering measures that can curb this activity that is inconsistent with the ordinary range of economic and financial activities. Due to the unlawful nature of money laundering, there is no precise detail of the magnitude of money involved in these transactions either daily or yearly. This piece of writing is a critique of a money laundering article.

Article

According to Wermuth Stefan from Reuters, HSBC was ordered to pay a record $1.9 billion because of the case that involved money laundering case which publicly demonstrated failure by the Europe’s greatest bank to enforce rule to curb money laundering. According to the US Justice Department, the bank was unable to set up an effectual policy that could curb money laundering and ensure maximum scrutiny on all accounts that they operate as even further violated sanction laws by transacting with clients from Iran, Burma and Cuba. The company owned up the mistakes and made an apology for its unlawful conducts. This conduct is purely money laundering because of the fact that the money was put in circulation in HSBC which is a financial institution and this is called placement.

This article successfully exposes how the bank entered an agreement with the Justice department and that they would ensure all the challenges are fixed and were fined $1.256 billion in addition to other fines which summed up to almost $1.92 billion plus other penalties that were to be announced at a later date. HSCBC also had further allegations where they ignored money laundering associated with some clients from Mexico that were involved drug trafficking such as including one of the riskiest countries such as Mexico in its lowest risk category. In this regard, the bank is said to have sent stern warning to its multinational banks to keenly follow the antimony laundering rules that are set (Wermuth 2013).

The author has widely researched on this bank and has even exposed the previous cases involving HSBC. This case is almost the third one that involves inability of the bank to obey the banking laws especially considering the previous directives by the regulators that ordered them to improve their oversight and additional order from US authorities that they should monitor all suspicious transactions. The bank is also reported to have assured its investors that they have set aside almost $1.5 billion to cover fines and penalties arising from the litigations yet this sum of money may notably rise and this hugely damages the brand of the company. The bank has since employed an anti-money laundering expert who was a chief legal advisor in the Treasury Department and further installed an independent anti-money laundering system between 2009 and 2011. There are other several banks that have been accused of money laundering and sanctions violations such as Wachovia Corp, Citigroup, Britain’s Lloyd banking Group, Barclays bank and Dutch bank (Wermuth 2013).

The author of this article has clearly brought up the issue of money laundering in a very good way and has even exposed some of the victims which is very important to the public and this is act by the bank is called Bank complicity because the bank is seen to be transacting with the drug traffickers and other organized crime groups as well as transacting with other countries involved in sanctions with America without considering adequate rules. The previously laundered money is easily injected into the economy by the financial institutions such as using known foreign banks which further sophisticates the process making it a very difficult target for law enforcers.

Reference

Wermuth, Stefan. (2013). HYPERLINK “http://www.nbcnews.com/business/banking-giant-hsbc-pay-record-1-9-billion-money-laundering-1C7541128” Banking Giant HSBC To Pay Record $1.9 Billion In Money-Laundering Case.Nbc Business, n.p. HYPERLINK “http://www.nbcnews.com/business/banking-giant-hsbc-pay-record-1-9-billion-money-laundering-1C7541128” http://www.nbcnews.com/business/banking-giant-hsbc-pay-record-1-9-billion-money-laundering-1C7541128.