On Sunday, several world banks cited confidential documents deposited by banks with the US government, despite red flags about the origin of the money, which allegedly transferred large sums of illicit funds over almost two decades.
Media reports were based on reports of
suspicious activity (SARS) filed by banks and other financial companies with
the US Treasury's Financial Crimes Enforcement Network (FINC).
The storks, numbering more than 2,100,
were reportedly acquired by BuzzFeed News and shared with the International A consortium of Investigate Journalists (ICIJ) and other media organizations.
Overall, ICIJ reported that the files contained information on more than 2 2 trillion in transactions between 1999
and 2017, which were described’ as suspicious by financial institutions'
internal construction departments. SARs are not necessarily evidence of
wrongdoing in themselves and the ICIJ has reported that the disclosure of the document is a small part of the reports filed with FinCEN.
Five appear frequently in World Bank
documents, according to ICIJ. HSBC Holdings PLC, JP Morgan Chase & Co.,
Deutsche Bank AG, Standard Chartered PLC, and Bank of New York Milan
Corporation. SARS provides key intelligence in global efforts to curb money
laundering and other crimes. Media reports on Sunday painted a picture of a
system that has become uncontrollable and overwhelmed, allowing large amounts
of illicit funds to flow into the banking system.
According to the Office of the Comptroller
of the Treasury of Currency, a bank has a maximum period of 60 days after the
date of initial detection for notification. In some cases, banks failed to
report suspicious transactions years after they took action, the ICIJ report
said.
The report said the SAR also revealed that
banks often transfer funds to companies that were registered’ in offshore
houses, such as the British Virgin Islands, and did not know the final owner of
the account. It said staff at large banks often used Google search to find out
who was behind large transactions.
In light of significant transactions
through this report: Funds executed by JPMorgan for potentially corrupt
individuals and companies in Venezuela, Ukraine, and Malaysia. Money from a Ponzi
scheme passing through HSBC. And money linked to a Ukrainian billionaire
through Deutsche Bank.
"I hope these findings encourage
policymakers to take immediate action to implement the necessary reforms,"
said Tim Adams, chief executive of the Trade Group Institute of International
Finance. "As today's reports suggest, the effects of financial crime are
felt outside the financial sector alone - posing a serious threat to society as
a whole."
"All information provided by ICIJ is
historical," HSBC said in a statement to Reuters. "HSBC embarked on a
multi-pronged journey to restore its ability to deal with financial crime in
more than 60 jurisdictions," the bank said in a statement in 2012.
"We take our responsibility to fight
financial crime very seriously and have made significant investments in our
construction programs," Standard Chartered said in a statement to Reuters.
BNY Mellon told Reuters she could not
comment on specific SARs. "We fully comply with all applicable laws and
regulations, and assist the authorities in their important work," the bank
said.
JPMorgan said it had "thousands of
people and hundreds of millions of dollars allocated for this important
work." "We have played a leading role in anti-money laundering
reforms," the bank said in a statement.
In a statement on Sunday, Deutsche Bank
said the ICIJ had "reported a number of historical issues." "We
have dedicated significant resources to strengthening our controls and we are
very focused on fulfilling our responsibilities and obligations," the bank
said.
Finn said in a statement on its website on
September 1 that it was aware that various media outlets intended to publish a
series of articles based on illegally disclosed SARS, as well as other
documents, and "Unauthorized SARS disclosure is a crime that could affect
US national security," it said.
U.S. Treasury officials declined to
comment further on FinCen's statement.
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