Financial crime risk policies
HSBC is committed to high ethical standards. Our policies on anti-money laundering, sanctions, and anti-bribery and corruption aim to ensure that risks identified by the bank are appropriately mitigated.
HSBC (all wholly owned or controlled HSBC Group of companies) is committed to implementing single global standards shaped by the most effective anti-money laundering standards available in any location where HSBC operates.
HSBC has established a Global Anti-Money Laundering Programme (“AML Programme”) for this purpose. The objective of the AML Programme is to ensure that money laundering risks identified by HSBC are appropriately mitigated. This is achieved by establishing Board-approved, minimum governing policies, principles, and standards and implementing appropriate controls, to protect HSBC, its employees; shareholders and customers from money laundering. The AML Programme provides guidance to all HSBC employees, requiring them to conduct business in accordance with applicable AML laws, rules, and regulations.
The AML Programme is based upon various laws, regulations and regulatory guidance from the United Kingdom, the European Union, Hong Kong, the United States of America, and, as applicable, local jurisdictions in which HSBC does business.
The Programme includes but is not limited to:
- The appointment of a Global and Country Money Laundering Reporting Officer (“MLRO”) or alternative position as required by local regulation
- A Customer Due Diligence (“CDD”) Programme, which incorporates Customer Identification and Verification (“ID&V”) and Know Your Customer (“KYC”) principles, and the implementing of programmes designed to appropriately remediate CDD of our existing customers
- Conducting enhanced due diligence (“EDD”) on customers assessed as higher risk, such as Politically Exposed Persons (“PEPs”) in senior positions, their relatives and close associates
- Establishing processes and systems designed to monitor customer transactions for the purpose of identifying suspicious activity
- The investigation and subsequent reporting of suspicious activity to the appropriate regulatory bodies
Mandated regular independent testing and regular AML training of its employees and contractors
- The prohibition of the following products, services and customer types:
- Anonymous accounts or numbered accounts or customers seeking to maintain an account in an obviously fictitious name
- Shell banks, i.e. banks with no physical presence or staff
- Hold Mail, i.e. where the customer has instructed all documentation related to the account are to be held on their behalf until collection
- Payable-through-accounts, i.e. HSBC does not allow domestic or foreign bank customers to provide payable-through-accounts to their customers on their HSBC accounts; and
- Any relevant additional local requirements.
HSBC is a member of the Wolfsberg Group, an association of thirteen global banks that aims to develop financial services industry standards for KYC, AML and Counter Terrorist Financing.
HSBC is committed to complying with the sanctions laws and regulations of the European Union, Hong Kong, the United Kingdom, the United Nations, and the United States, as well as other applicable sanctions laws and regulations in the jurisdictions in which HSBC operates, subject to the primacy of local laws and regulations.
HSBC’s Global Sanctions Policy defines the minimum standards which all HSBC Group entities must comply with, including:
- Screening customers/clients and transactions globally against the sanctions lists issued by the United Nations, the European Union, the United Kingdom, the United States and Hong Kong.
- Screening locally against other sanctions lists that apply to HSBC’s operations in a particular jurisdiction.
- Prohibiting business activity, including prohibitions on commencing or continuing customer relationships or providing products or services or facilitating transactions that HSBC believes may violate applicable sanctions laws or HSBC’s Global Sanctions Policy. This includes prohibitions on business activity with individuals or entities named on a sanctions list or activity, directly or indirectly, involving countries or territories subject to comprehensive sanctions. As of October 2019, these countries and territories include Cuba, Iran, North Korea, Syria and the Crimea region.
- Restricting certain business activity involving, directly or indirectly, countries or persons subject to more selective or targeted sanctions programmes. These sanctions apply restrictions on some types of products or services or target certain industry sectors or governments. As of October 2019, the selective country programmes prohibit transactions and services relating to:
- the provision of funding to the Government of Belarus or Government of Zimbabwe;
- a donation from the Government of Sudan to a U.S. person;
- certain activity involving the Government of Venezuela1;
- certain debt or equity of, and certain other transactions and services involving, the Russian financial, energy and defence sectors;
- participating in the primary market for non-ruble bonds issued by, and lending non-ruble denominated funds to, the Russian Sovereign2
- Investigating all customer/client alerts or transactions that are stopped in HSBC’s screening systems. While HSBC seeks to investigate these alerts and transactions in a reasonable timeframe, compliance with applicable sanctions laws or HSBC’s Global Sanctions Policy may result in delays to the processing of customer transactions while additional due diligence is conducted and information obtained on the nature of the underlying transaction or the parties involved.
- Blocking or rejecting transactions where HSBC is required to do so under applicable sanctions laws or regulations or HSBC’s Global Sanctions Policy. Transactions may also be returned by HSBC where they fall outside of HSBC’s risk appetite.
- Reporting breaches of sanctions laws to the relevant regulatory authority. This can include any attempt by a customer to evade sanctions laws.
HSBC may agree to process certain transactions, in its sole discretion, such as those which relate to humanitarian aid or which are otherwise permitted by a licence from an appropriate authority. These transactions will be considered on a case-by-case basis and must be submitted in advance to HSBC for consideration and approval.
HSBC may, in its sole discretion, also decide not to process transactions, provide products or services or otherwise facilitate transactions even where permitted by applicable sanctions laws and regulations where these activities fall outside of HSBC’s risk appetite.
1 The term “Government of Venezuela” means The state and Government of Venezuela, any political subdivision, agency, or instrumentality thereof, includ ing the Central Bank of Venezuela and Petroleos de Venezuela, S.A. (“PdVSA”), any person owned or controlled, directly or indirectly, by the foregoing, and any person who has acted or purported to act directly or indirectly for or on behalf of, any of the foregoing, including as a member of the Maduro regime.
2 The term “Russian sovereign” means any ministry, agency, or sovereign fund of the Russian Federation, including the Central Bank of Russia, the National Wealth Fund, and the Ministry of Finance of the Russian Federation.
HSBC Holdings plc and the wider HSBC Group (HSBC) are committed to high standards of ethical behaviour and have zero tolerance towards bribery and corruption. HSBC requires compliance with all anti-bribery and corruption laws in all markets and jurisdictions in which it operates. These laws include the UK Bribery Act, the US Foreign Corrupt Practices Act and the HK Prevention of Bribery Ordinance, as well as other similar laws and regulations in the countries where we operate.
HSBC’s Anti-Bribery and Corruption (AB&C) compliance programme and policies are overseen by the HSBC Holdings plc Board. The policy incorporates the results of regular risk assessments and emphasises that books and records must be fair, accurate, and kept in reasonable detail. HSBC requires all employees, including the Board of Directors and Associated Persons, to comply with the principles in the policy in the performance of their services for or on behalf of HSBC.
HSBC’s Global AB&C Programme includes the following statement of overarching key principles:
- All activity:
- Must be conducted without intent to bribe or corrupt;
- Must be reasonable and transparent;
- Must not be considered lavish or disproportionate to the professional relationship;
- Must be appropriately documented with business rationale; and
- Must be authorised at an appropriate level of seniority.
Furthermore, it is unethical, illegal, and contrary to HSBC principles and good corporate governance to bribe or corrupt others, including to:
- Offer, promise, give or authorise others to give or agree with anyone else to offer, promise, give or authorise others to give, anything of value, directly or indirectly, to any party, or to influence any Public Official; or
- Solicit or receive anything of value, directly or indirectly, from any party; or
- Offer or provide a facilitation payment (exceptions may be permitted in limited circumstances where an employee’s health, safety and/or liberty is at risk);
in order to obtain or retain business or otherwise gain an unfair advantage in business.
Based on the principles above, the AB&C Programme imposes requirements under four risk pillars:
Employee Risk: All HSBC entities and individuals are required by policy to have appropriate controls in place to manage risks and maintain records when offering or accepting gifts, entertainment, sponsorships, travel & accommodation or other advantage or when engaging in charitable giving, political expenditure or recruitment.
In connection with recruitment, it must be merit-based, fair, and in keeping with the stringent hiring standards applied by HSBC. Hiring, in paid or unpaid, temporary or permanent roles, must not be used to influence third parties or to obtain or retain business or an advantage in business.
Third Party Risk: All HSBC entities and individuals are required by Policy to ensure that appropriate due diligence and controls are applied to any third party they engage, to ensure that they comply with the letter and spirit of applicable anti-bribery legislation and regulation. When a third party performs services for or on behalf of HSBC, additional controls are applied to manage the enhanced risks from Associated Persons.
Strategic Risk: All HSBC entities and individuals are required by Policy to apply controls in order to protect against bribery and corruption risks, in areas such as strategic proprietary investments, acquisitions, disposals, joint ventures and the development of products & services.
Customer Risk: All HSBC entities and individuals are required by Policy to ensure that Bribery & Corruption risks identified from customer behaviour or the provision of products and services to Customers are effectively managed through the application of controls.
As part of the prevention, identification and remediation of AB&C issues, mandatory training is conducted throughout HSBC, in addition to targeted training tailored to the roles of the individuals.
HSBC carries out regular, risk assessments, monitoring and testing of its AB&C programme.
HSBC also maintains clear whistleblowing policies and processes, to ensure that individuals can confidentially report concerns, with no fear of retribution, confident that they will be investigated and remediated appropriately.
To view the statement on HSBC’s whistleblowing arrangements see the Environmental, Social and Governance (ESG) update published on the ESG information page.
HSBC is an active user of Know Your Customer (“KYC”) data exchange platform SWIFT KYC Registry (opens in new window) in support of a more intelligence-based approach to identifying and managing financial crime risks. Third-party banks or vendors seeking HSBC AML or KYC due diligence information, including the detailed Wolfsberg Correspondent Banking Due Diligence Questionnaire (CBDDQ), should use this service in the first instance to collect relevant data and documents. Only if the information sought is not available, please send an e-mail request directly to HSBC using the following e-mail address: firstname.lastname@example.org.
As a supplement to the HSBC AML statement we also make available the Wolfsberg Financial Crime Compliance Questionnaire (FCCQ), which gives an overview of basic information about HSBC’s policies and processes relating to financial crime risk management.
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