Analysis: HSBC victory in UK case a relief to money-laundering monitors

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The case focused on HSBC’s decision to block four transactions totaling more than $38 million between September 2006 and February 2007. The bank suspected Shah of money laundering and sought consent from the Serious Organised Crime Agency (SOCA), the UK’s financial intelligence unit, to proceed with the transfers.

Shah claimed that the delay in carrying out his requests in part led to the Reserve Bank of Zimbabwe freezing his investments in Zimbabwe and caused him significant losses. SOCA later gave consent to the transactions as legitimate. Shah had ‘parked’ the majority of the money in his HSBC account following an attempted fraud on his Credit Agricole account in July 2006.

…”This case should be regarded as having been decided on its facts, and MLROs should proceed as before, taking care to address the issue of whether or not there are reasonable grounds for suspicion in a straightforward way,” he said.

Nevertheless, he said, the case kept the money-laundering process under a microscope. “The HSBC MLRO (Michael Wigley) was grilled for a number of days and his actions are now enshrined in a court judgment. MLROs have got to keep on their toes. HSBC didn’t cover itself in glory but it will be pleased and relieved at the decision,” Fisher said.

Detailed report link (© Reuters): here