HSBC Fined $32,000 for Sanctions Violations

HSBC Bank USA, the U.S. unit of HSBC Holdings HSBA.LN +0.29% PLC, agreed on Tuesday to pay $32,400 to resolve sanctions violations.

Bloomberg News
A logo sits on a sign outside a HSBC Holdings PLC bank branch in London on Dec. 9, 2013.

The U.S. Treasury Department’s Office of Foreign Assets Control announced the penalty in a notice quietly posted to its website. It said the bank voluntarily disclosed the apparent violations, and they constituted a non-egregious case.

“OFAC concluded that the apparent violations…were not the result of willful or reckless conduct,” the notice said.

According to the notice, HSBC handled transactions in late 2010 and early 2011 worth about $40,000 that benefited Tajco, a company involved in international trade and real estate owned by Husayn Tajideen, both of which were placed under U.S. sanctions in December 2010 for financing Hezbollah.

“HSBC discovered this issue, and as noted in the OFAC filing, voluntarily self-disclosed and took appropriate remedial action. We now have a more robust compliance program in place,” said Robert Sherman, a spokesman for HSBC.

About a year ago, the bank entered into a record-breaking settlement,  agreeing to forfeit nearly $1.3 billion and pay a civil fine of $650 million for money laundering and assorted other violations. HSBC has since reorganized its compliance efforts.

But a Treasury spokesman said in an email that Tuesday’s settlement is unrelated to the December 2012 agreement with OFAC and other federal and state agencies.

“This action is similar to other settlements OFAC has reached with regard to apparent violations committed by U.S. financial institutions,” he said.

Concerns about HSBC’s interaction with Tajco have been in the public eye for about 18 months: Reuters and Rolling Stone each reported, citing ex-HSBC compliance officer Everett Stern, that the bank had handled money on behalf of Tajco and he had raised internal concerns about it.

Mr. Sherman declined to comment on the remarks of former employees.

-Rachel Louise Ensign contributed to this report.

Write to Samuel Rubenfeld at Samuel.Rubenfeld@wsj.com. Follow him on Twitter at @srubenfeld.

 

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