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London-headquartered HSBC and StanChart, among other global banks, have paid billions of dollars in fines in recent years for violating U.S. sanctions on Iran and anti-money laundering rules.
The files contained information about more than $2 trillion worth of transactions between 1999 and 2017, which were flagged by internal compliance departments of financial institutions as suspicious.
The ICIJ reported the leaked documents were a tiny fraction of the reports filed with FinCEN. HSBC and StanChart were among the five banks that appeared most often in the documents, the ICIJ reported.
“It confirms what we already knew – that there are huge numbers of SARs being filed with relatively low numbers of cases brought through to prosecution,” said Etelka Bogardi, a Hong Kong-based financial services regulatory partner at law firm Norton Rose Fulbright.
COMBATING FINANCIAL CRIME
The SARs showed that banks often moved funds for companies that were registered in offshore havens, such as the British Virgin Islands, and did not know the ultimate owner of the account, the report said.
Staff at major banks often used Google searches to learn who was behind large transactions, it said.
In some cases the banks kept moving illicit funds even after U.S. officials warned them they could face criminal prosecutions if they continued to do business with criminals or corrupt regimes, it said.
Global banks in the recent years have boosted investments on technology and staff to deal with tighter anti-money laundering and sanctions regulatory requirements across the world.
Thousands of clients were booted out of bank accounts in major wealth hubs including Hong Kong and Singapore after a money laundering scandal in Malaysia, the ‘Panama Papers’ expose, and a global push for tax transparency.
FinCen said in a statement on its website on Sept. 1 that it was aware that various media outlets intended to publish a series of articles based on unlawfully disclosed SARs, as well as other documents.
© Thomson Reuters 2020
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