Financial Transparency Coalition

The bail out of the troubled banking sector in Cyprus has taken on serious political overtones as the crisis deepens. During the past few weeks Cyprus has been accused of failing to combat money laundering and fraud and that Russian oligarchs seek refuge for their money in this “tax haven” country.

Yesterday, the U.S. Senate Banking Committee held a hearing titled, "Patterns of Abuse: Assessing Bank Secrecy Act Compliance and Enforcement." The committee called three regulators to testify: David Cohen, Under Secretary for Terrorism and Financial Intelligence, United States Department of the Treasury; Thomas Curry, Comptroller, Office of the Comptroller of the Currency (OCC); and Jerome H. Powell, Governor, Board of Governors of the Federal Reserve System.

In December of last year the U.S. Department of Justice discovered that HSBC, a large British bank, “willfully failed” to apply money laundering controls to at least $881 million in drug trafficking proceeds from Mexico and covered up illegal transactions for Burma, Iran, Sudan, Cuba, and Libya. To escape criminal charges, HSBC admitted to wrongdoing and paid a record $1.92 billion settlement. Yet despite this massive offense, not a single person went behind bars as a result. This wasn’t just a failure of the system or the anonymous bureaucracy of a massive corporation. The investigation revealed that senior HSBC officials...

WASHINGTON, DC – In the wake of recent money laundering compliance failures at major U.S. and international banks, the U.S. Senate Committee on Banking, Housing, and Urban Affairs is currently scheduled to hold a hearing Thursday, March 7, 2013 entitled, “Patterns of Abuse: Assessing Bank Secrecy Act Compliance and Enforcement.” Heather Lowe, Legal Counsel and Director of Government Affairs at Global Financial Integrity (GFI), a Washington, DC-based research and advocacy organization, issued the following statement in advance of the hearing.