Hsbc Compliance Manual
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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. 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 applicable sanctions laws and regulations in the jurisdictions in which HSBC operates.
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 (UN), the European Union (EU), the United Kingdom (HMT), the United States (OFAC) and Hong Kong (HKMA).
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 January 2018, 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.
Compliance Manual For Banks
As of January 2018, 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 debt or equity of, and certain other transactions and services involving, the Government of Venezuela 1; and. certain debt or equity of, and certain other transactions and services involving, the Russian financial, energy and defence sectors. 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.
Hsbc Compliance Regulation
This can include any attempt by a customer to evade sanctions laws. HSBC may agree to process certain transactions with a sanctions nexus, 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.
1The term “Government of Venezuela” means the Government of Venezuela, any political subdivision, agency or instrumentality thereof, including the Central Bank of Venezuela and Petroleos de Venezuela, S.A. (“PdVSA”), and any individual or entity owned or controlled by or acting for or on behalf of the Government of Venezuela. HSBC Holdings plc and the entities that form the 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. Policies incorporate the results of regular risk assessments and emphasise 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 these policies in the performance of their services for or on behalf of HSBC.
HSBC’s Global AB&C Programme includes the following statement of principles:. It is unethical, illegal, contrary to HSBC principles and good corporate governance to bribe or corrupt others, including to:. Offer, provide, agree to accept or accept anything of value to induce recipients to act improperly, whether directly or indirectly (eg to a close family member or other closely connected person); 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;. Influence or attempt to influence Public Officials in order to obtain or retain business or an advantage in business. HSBC is an active user of Know Your Customer (“KYC”) data exchange platforms (such as kyc.com and SWIFT KYC Registry) in support of a more intelligence-based approach to identifying and managing financial crime risks.
Relevant HSBC due diligence documents and information can be found via these utilities. Third-party banks or vendors seeking HSBC due diligence information should use these utilities in the first instance. Only if the information sought is not found in the utilities, then please send an e-mail request directly to HSBC using the following e-mail address:.
HSBC is incorporating Ayasdi’s technology to tackle money laundering. By using artificial intelligence (AI), the bank aims to save costs in efficient and automated data analysis which will reorganize its compliance efforts. Regtech has seen significant collaboration recently. The technology can help financial institutions stay compliant with regulations and avoid fines in areas such as AML (anti money laundering) and KYC (Know Your Client). Many banks are now using AI and automation to save costs and time on cumbersome and manual processes ranging from compliance checks to customer service. At the same time, they have been working more closely with regtech companies and reducing the amount of technology that they build in-house.
Recently, (an AI startup) to automate some of its compliance processes in order to become more efficient. The bank is implementing Ayasdi’s AI technology to automate its anti-money laundering investigations, which were traditionally conducted by individuals.
According to research conducted by Ayasdi, the majority of anti-money laundering investigations conducted by banks are unable to detect unusual activity, resulting in a waste of time and resources. AI technology excels in tasks that human beings are not typically good at, such as high-frequency, high-volume analysis of data. Therefore the use of AI will increase the likelihood that compliance efforts are successful. Additionally, adding AI into the mix could automate the process significantly, allowing HSBC to put its human workforce to better use and operate in a more efficient manner. In a 12-week pilot carried out by HSBC, Ayasdi’s AI technology was able to achieve a 20% reduction in false positives while maintaining the same number of reports of suspicious activity for human review. Going forward, Ayasdi and HSBC are looking to evolve the success of the pilot, which could save the bank millions of dollars per year. Many banks these days are eyeing their bottom lines while seeking to boost their compliance efforts. The partnership between HSBC and Ayasdi demonstrates one strategy within regtech where banks are seeking to adopt existing technologies rather than build them in-house.
By Resham Karira, Retail Banking Analyst To get in touch please contact. Have something to say on this topic? Join our LinkedIn group:.