In July 2023, Riad Salameh, the former head of Lebanon’s central bank, retired after 30 years in office. However, he is currently being investigated for siphoning off hundreds of millions of dollars through accounts in Switzerland. The Financial Markets Supervisory Authority (Finma) in Switzerland has concluded its investigation and imposed severe sanctions on HSBC Private Bank (Suisse), citing serious violations of its duty of care to prevent money laundering in dealings with two politically exposed persons, likely Riad Salameh and his brother Raja.
The transactions under scrutiny took place between 2002 and 2015, totaling over 300 million dollars. According to Finma, the bank failed to adequately check the origin of the assets and their purpose and background, leading to insufficiently clarified and documented transactions with increased risk. Despite deciding to end its business relationship with the Salameh brothers in 2016 for risk reasons, HSBC only reported the matter to the Federal Money Laundering Reporting Office in September 2020.
As a result of the investigation, Finma has mandated a series of measures for HSBC, including a review of all ongoing business relationships with politically exposed persons and enhanced monitoring by an appointed auditor. The bank has acknowledged the issues raised and plans to appeal the decision while emphasizing its commitment to combatting money laundering and complying with regulations.
This is not the first time HSBC Private Bank (Suisse) has faced scrutiny. In 2011, it was reprimanded by Finma for data theft and faced criminal proceedings in 2015 following Swissleaks revelations. Banque Audi (Suisse) was also reprimanded last March for money laundering failures related to the same individuals. The Office of the Federal Prosecutor continues to conduct a criminal investigation into aggravated money laundering against the Salameh brothers.
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