By Elena Vardon


HSBC's Swiss private bank violated money-laundering regulations by not undertaking necessary checks on high-risk accounts, the country's financial regulator said.

The global bank operated two high-risk business relationships with unnamed politically exposed persons, the watchdog, known as Finma, said Tuesday. It added that HSBC didn't carry out adequate checks on the origin, purpose or background of assets linked to suspicious transactions totaling more than $300 million in funds, which were moved from Lebanon to Switzerland and back between 2002 and 2015.

"In its checks, the bank failed to recognize the indications of money laundering presented by these transactions; it likewise failed to satisfy requirements for the initiation and continuation of customer relationships with politically exposed persons, and was thus in serious breach of its due diligence obligations," Finma said.

The bank was ordered to conduct a review of all its current high-risk business relationships and those with politically exposed persons. It can't enter new business relationships with politically exposed persons until the measures are fully implemented and the completion of the review is confirmed by an external auditor, the regulator added.

"We acknowledge the matters raised by Finma, which are historic," an HSBC spokesperson said.

"HSBC takes its anti-money laundering obligations very seriously, including complying with all laws and regulations in every market we operate in," they added. The bank plans to appeal the decision.


Write to Elena Vardon at elena.vardon@wsj.com


(END) Dow Jones Newswires

06-18-24 0915ET