HSBC Private Bank (Suisse) SA

FINMA enforcement: serious breach of anti-money laundering obligations in two PEP relationships (funds from Lebanon)

FINMA opened proceedings in December 2021 and concluded in June 2024 that HSBC Private Bank (Suisse) SA breached its anti-money laundering obligations in two high-risk relationships with politically exposed persons; transactions between 2002 and 2015 totalled more than USD 300 million and moved from Lebanon to Switzerland and largely back. FINMA ordered a review of all high-risk and PEP relationships, a check of customer risk categorisation, an audit researcher on site, and a ban on new PEP relationships until the measures are implemented. FINMA stated the decision had not entered into force; no monetary penalty is stated.

The transactions in question were carried out between 2002 and 2015 and amounted to a total of more than USD 300 million.

Review of all current high-risk and PEP relationships from an AML perspective; check of risk categorisation of other customers; on-site monitoring by an audit researcher reporting to FINMA; detailed account of responsibilities within board and executive management.

Deferred prosecution agreement, conspiracy to defraud the United States and help US clients evade tax (2000 to 2010)

The the US Department of Justice announced a deferred prosecution agreement filed in the Southern District of Florida under which HSBC Private Bank (Suisse) SA admitted that between 2000 and 2010 it conspired with employees, fiduciaries and US clients to conceal assets and evade US tax, with undeclared US assets peaking at about USD 1.26 billion in 2007. The bank agreed to pay USD 192.35 million in three parts (penalty, restitution, forfeiture) and to cooperate for an initial three year term.

The $192.35 million penalty against HSBC Switzerland has three parts.

Full cooperation, proactive disclosure of US-related account information, reporting on accounts closed 2009 to 2017.

Convention judiciaire d'intérêt public (first French CJIP), aggravated tax fraud laundering and illegal solicitation of French clients

The PNF and HSBC Private Bank (Suisse) SA concluded a CJIP under which the bank paid EUR 300 million (a public interest fine of EUR 157,975,422 made up of EUR 86.4 million disgorgement and a EUR 71,575,422 penalty, plus EUR 142,024,578 damages to the French State). The prosecution estimated that French clients concealed at least EUR 1,638,723,980 in 2006 and 2007. A CJIP does not carry a declaration of guilt under French law, although the text records that the bank acknowledges the facts and accepts their legal characterisation. The exact signature and validation dates are not printed in the AFA copy.

PBRS acknowledges these facts and accepts their legal characterization.