HSBC 'processed £435m of laundered Russian cash'
Barclays, Lloyds and Royal Bank of Scotland also reportedly caught up in 'Global Laundromat' scandal
British bank HSBC has been accused of passing millions of pounds of transactions in a global money-laundering scandal with roots in Russian organised crime.
According to a report in The Guardian, it processed $545.3m (£437.3m) out of Russia between 2010 and 2014, mostly through its Hong Kong branch.
Other UK-based banks are also implicated, including Barclays, Lloyds and Royal Bank of Scotland, which, through NatWest and Coutts, is thought to have moved a total of $147m (£118m).
Subscribe to The Week
Escape your echo chamber. Get the facts behind the news, plus analysis from multiple perspectives.
Sign up for The Week's Free Newsletters
From our morning news briefing to a weekly Good News Newsletter, get the best of The Week delivered directly to your inbox.
From our morning news briefing to a weekly Good News Newsletter, get the best of The Week delivered directly to your inbox.
Police in Latvia and Moldova, who uncovered the scandal, dubbed "the Global Laundromat", have traced about $20bn (£16bn) in transfers out of Russia. However, they believe the true figure could be closer to $80bn (£64bn).
Reports say the transfers were typically facilitated by one firm agreeing to lend money to another, with the "debt" underwritten by a third Russian company.
The loanee company would then "default" on that debt, at which point the borrowings would be certified by a judge and the Russian guarantor would step in to pay up.
Cash would be sent to accounts in Moldova, from where it was moved to Latvia and then on to as many as 96 other countries.
The scandal is said to have involved a core group of 21 companies, most of them owned anonymously through offshore shell companies and registered with Companies House in London.
The Guardian reports that a company based on Tooley Street in London, around the corner from the mayor of London's office and City Hall, posted income of £1 in 2013, but was involved in $9bn (£7.2bn) worth of transactions during the period in question.
Investigators, who say the money involved was "obviously either stolen or with criminal origin", estimate a group of about 500 Russians were involved, including oligarchs, bankers and figures working for or connected to the Federal Security Service (FSB).
The UK banks did not deny the information, but each said they take extensive precautions against money laundering. There is no suggestion of any deliberate wrongdoing.
A spokesperson for HSBC said: "This case highlights the need for greater information sharing between the public and private sectors, each of whom holds important information the other does not."
Create an account with the same email registered to your subscription to unlock access.
Sign up for Today's Best Articles in your inbox
A free daily email with the biggest news stories of the day – and the best features from TheWeek.com
-
'A new era of hurricanes'
Today's Newspapers A roundup of the headlines from the US front pages
By The Week Staff Published
-
How Britain's demographic is changing
A 50-year record population increase was fuelled by greater migration
By Richard Windsor, The Week UK Published
-
The story of Japanese jeweller Tasaki
The Blend A revival in the use of pearls in fashion and jewellery design places heritage brand Tasaki centre stage
By Felix Bischof Published
-
Labour shortages: the ‘most urgent problem’ facing the UK economy right now
Speed Read Britain is currently in the grip of an ‘employment crisis’
By The Week Staff Published
-
Will the energy war hurt Europe more than Russia?
Speed Read European Commission proposes a total ban on Russian oil
By The Week Staff Published
-
Will Elon Musk manage to take over Twitter?
Speed Read The world’s richest man has launched a hostile takeover bid worth $43bn
By The Week Staff Last updated
-
Shoppers urged not to buy into dodgy Black Friday deals
Speed Read Consumer watchdog says better prices can be had on most of the so-called bargain offers
By The Week Staff Published
-
Ryanair: readying for departure from London
Speed Read Plans to delist Ryanair from the London Stock Exchange could spell ‘another blow’ to the ‘dwindling’ London market
By The Week Staff Published
-
Out of fashion: Asos ‘curse’ has struck again
Speed Read Share price tumbles following the departure of CEO Nick Beighton
By The Week Staff Published
-
Universal Music’s blockbuster listing: don’t stop me now…
Speed Read Investors are betting heavily that the ‘boom in music streaming’, which has transformed Universal’s fortunes, ‘still has a long way to go’
By The Week Staff Published
-
EasyJet/Wizz: battle for air supremacy
Speed Read ‘Wizz’s cheeky takeover bid will have come as a blow to the corporate ego’
By The Week Staff Published