The Sierra Leone High Commission in London is one of 40 diplomatic missions that have been asked by HSBC Bank to close their accounts amid claims that some were of a questionable nature. The bank is reeling from a record $1.9 billion settlement with the US government last month for allowing South American cartels that supply the US, the largest narcotics market in the world, to use the bank to launder billions of dollars. This topped the $780 million fine the US government slapped on Swiss bank UBS AG in 2009 for providing banking facilities to American citizens who then avoided paying US taxes.
After last month’s settlement, HSBC acknowledged that it had not been fully compliant with anti-money laundering procedures and has now agreed to link bonuses paid to executives to meeting compliance standards, ensure better internal information sharing and has appointed a compliance monitor.
In June HSBC sent a letter to the Sierra Leone High Commission asking it to pay off a mortgage balance of £194,000 and close the account by August 13. The money was paid but the High Commission is now looking for a new bank.
In his letter to the High Commission, Alastair Loudon, Deputy Regional Director at HSBC, explained: “We have recently conducted a strategic assessment of our Embassy business, and have concluded that this should not be a focus area for the Bank.
“We now ask that you make alternative arrangements for all products and services that we currently provide to your Embassy. In accordance with our Terms and Conditions, we will be closing your accounts on 13th August 2013 (next week Tuesday) which is 60 calendar days from the date of this letter.”
When Awoko initially contacted the press office at HSBC to find out whether other diplomatic missions in London had also been told to close their accounts, the response from the female press officer was an inane: “I’m afraid I am not able to confirm or deny any customer relationships.”
But The Mail on Sunday in London has now reported that 40 diplomatic missions had been asked to close their accounts at HSBC.
One banking expert in London has told Awoko that the government should ask officials at the High Commission to explain why Sierra Leone should suffer such an embarrassment.
“Far from being smug about the fact that the government has bailed out the High Commission to the tune of £194,000 to pay off its mortgage with HSBC for the Chancery in Central London, the senior staff should be asked to explain why the account is being closed.
“Closing a customer’s account is a very serious thing. Although it’s not the government’s fault, the demand to close the account should be viewed as an embarrassment to the government, which has been caused by a High Commission that has obviously been rather lax in the manner in which it has been running the HSBC account,” the expert said.
So, on what grounds are customers asked to close their accounts by banks? The banking expert explained: “A bank might close an account for a number of reasons such as if you are in overdraft; if there is a small amount in the account; if there is no activity over a long period of time; if money laundering is suspected; if any illegal activity is suspected such as terrorist financing.”
The US government has been on the case of big banks that have been wittingly or unwittingly laundering drugs money or conducting transactions for customers in countries such as Burma, Cuba, Iran, Libya and Sudan that are under US sanctions.
The banking expert told Awoko that with this new and stringent squeeze on banks, the government in Freetown would do well to find out how the High Commission’s London HSBC bank account was being operated in order not to fall foul of an aggressive US government that is snapping at the heels of financially non-compliant global banks.
“There should be a proper investigation so that something like this does not happen again,” the expert added.
When contacted the Press Attaché at the Sierra Leone High Commission, in the UK Sorie Sudan emailed this reply:“HSBC is not only closing down our account but also all other diplomatic missions all over the world. This is part of their international banking policy to cease operations with all diplomatic missions.”
He went on“In fact, part of that letter was quoted in my last report. It reads: “We have recently conducted a strategic assessment of our Embassy business and have concluded that this should not be a focus area for the Bank. We now ask that you make alternative arrangements for all products and services that we currently provide to your embassy.”
August 09, 2013
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