Regulation

Did Big Banks Play A Role In A Global Bribery Scheme?

An international investigation into the allegedly corrupt practices of an oil company appears to have a caught a couple of big banks in its net.

The Huffington Post reports that HSBC and Citibank were both essential players in facilitating contracts arranged by Unaoil — the Monaco-based firm that is currently the target of a bribery investigation by four different countries — between corporate conglomerates, like Halliburton and KBR, and corrupt regimes.

Noting that two federal statutes — the Bank Secrecy Act of 1970 and the Patriot Act of 2001 — criminalize any instances whereby banks process transactions that the institutions know are related to illegal doings (including ignoring warning signs that indicate that possibility), HuffPost reports that whether HSBC or Citibank broke the law in their dealings with Unaoil will depend on the aforementioned investigation’s determinations as to whether the deals themselves were illegal and, if so, if evidence supports that the banks knew (or should have known) that fact.

While both Citibank and HSBC declined to comment to HuffPost regarding whether Unaoil or the Ahsani family (who own and operate the firm) remain their clients, HSBC spokeswoman Sorrel Beynon wrote to the outlet: “As a matter of policy, we only maintain relationships with clients who have been vetted through our strict due diligence and compliance checks.”

Referring to thousands of internal Unaoil emails obtained by Fairfax Media and itself (and which were exposed in a previous HuffPost story), The Huffington Post attests that both HSBC and Citibank were “intimately involved” in the oil company’s finances.

The more recent HuffPost story additionally draws attention to a history of corrupt practices at both banks in question, citing (among other examples) HSBC’s having been fined $1.9 billion for laundering drug money and violating U.S. sanctions against Iran in 2012 and the fact that, last year, Citibank was fined $140 million for violations of money laundering laws related to its dealings with an energy company that likewise was involved in a bribery scandal.

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