A fresh scandal about dirty money is doing the rounds in International banks after leaked documents indicated that they transferred more than $2 trillion (£1.56 trillion) in suspect funds over nearly two decades.These leaks have exposed secret deals, money laundering and financial crime and the documents are some of the international banking system's most closely guarded secrets.Based on...
A fresh scandal about dirty money is doing the rounds in International banks after leaked documents indicated that they transferred more than $2 trillion (£1.56 trillion) in suspect funds over nearly two decades.
These leaks have exposed secret deals, money laundering and financial crime and the documents are some of the international banking system's most closely guarded secrets.
Based on leaked documents obtained by BuzzFeed News, Britain-based HSBC Holdings Plc, Standard Chartered Plc and Barclays Plc; Germany's Deutsche Bank AG and Commerzbank AG; US-headquartered JPMorgan Chase & Co and Bank of New York Mellon Corp were among the lenders named in the report by the International Consortium of Investigative Journalists.
The report was based on around 2,500 leaked suspicious activity reports (SARs), covering transactions between 1999 and 2017, filed by banks and other financial firms with the U.S. Department of Treasury's Financial Crimes Enforcement Network (FinCEN). Banks are required to file an SAR whenever handling funds that cause grounds for suspicion of criminal activity.
Although some banks said that robust checks have been put in place and many of the transactions were done long time ago, however the reports revealed lack of monitoring system at the heart of global policing of money laundering and other criminal activity.
Investors worried about the potential fallout for global banks, many of which have faced hefty fines in the past for lapses in controls and spent billions of dollars to bolster compliance.
Calling for reforms, The Institute of International Finance said, "There is a balance to be struck between managing financial crime risk and ensuring access to the financial system for legitimate customers."
Policymakers, regulators and banks have long acknowledged fundamental flaws in the anti-money laundering system.
Some of the documents leaked have shown that HSBC allowed fraudsters to move millions of dollars of stolen money around the world, even after it learned from US investigators the scheme was a scam.
Further, the reports have revealed that JP Morgan allowed a company to move more than $1bn through a London account without knowing who owned it. The bank later discovered the company might be owned by a mobster on the FBI's 10 Most Wanted list.
The leaked documents also indicate that the UK is called a "higher risk jurisdiction" and compared to Cyprus, by the intelligence division of FinCEN. That's because of the number of UK registered companies that appear in the SARs. Over 3,000 UK companies are named in the FinCEN files - more than any other country.