On Tuesday, the U.K. bank HSBC agreed to pay $1.9 billion—including $1.2 billion in forfeiture—to resolve allegations that the bank violated the Bank Secrecy Act by failing to maintain an effective anti-money-laundering compliance program and follow U.S. trade control laws for conducting transactions on behalf of customers in sanctioned countries including Cuba, Iran, Libya, Sudan, and Burma. Though monitors appointed by the U.S. Department of Justice are increasingly uncommon, HSBC agreed to a monitor who will oversee the bank’s compliance program for the next five years—the maximum potential period of corporate probation and the longest monitorship in recent memory. The U.K. Financial Services Authority is pursuing a separate action against the bank.
The big forfeiture numbers grabbed the headlines, but the real lesson for corporate compliance officers is found in the five pages worth of remedial measures to address sanctions and money-laundering risk (see pages 5-9 of the HSBC Deferred Prosecution Agreement [PDF]).
