HSBC and Lebanon banking controversy

HSBC and Lebanon banking controversy refers to accusation against HSBC’s Swiss private banking division for alleged failures in anti money laundering (AML) controls related to the extraction of hundreds of millions of dollars from Lebanon's central bank, Banque du Liban (BDL). This controversy is directly linked to the financial dealings of Riad Salameh, the former governor of Lebanon's central bank, and his brother Raja Salameh.

Background

Since 1946 HSBC has operated a network of branches across Lebanon through is subsidiary HSBC Bank Middle East Ltd. Towards the end of 2016, on November 16, the bank announced it is selling its retail, corporate, and wealth management operations in Lebanon to BLOM Bank. The transaction was completed on 13 June 2017.[1][2]

According to sources from 2002 up to 2015, about $300 million were transferred from Lebanon's central bank to HSBC's Swiss bank accounts. The money was later sent to different accounts connected to powerful people in Lebanon.[3][4][5] It was said to be moved through a shell company called Forry Associates Ltd, run by Riad Salameh's brother, Raja Salameh. Prosecutors in Lebanon and Europe say this company was used to pass along commissions and other money taken from the central bank, money they claim was actually stolen public funds.[3]

FinCEN and Swiss regulatory actions

FINMA Sanctions, June 2024

In June 2024, Switzerland's financial regulator FINMA published its conclusions regarding an investigation that HSBC Private Bank (Suisse) SA had broken anti money laundering rules in a serious way.[3][6][7] The case involved two politically exposed people, they are believed to be former Lebanese central bank governor Riad Salameh and his brother Raja Salameh.[3][8] Between 2002 and 2015, over $300 million were moved from a Lebanese state institution through their accounts, without proper checks or reporting. The accounts were closed in 2016, but FINMA was not officially notified until September 2020.[3][7]

Following this investigation FINMA placed sanctions on HSBC's Swiss private bank and demanded that:[3]

  • Conduct a comprehensive AML review of all high-risk and PEP-related business relationships.
  • Refrain from opening any new accounts for PEPs until an independent auditor confirmed completion of the review.
  • Provide detailed documentation of governance responsibilities within the bank's board and executive management

2025 developments

Ongoing investigations

In July 2025, it was revealed that there was an ongoing investigation by both French and Swiss authorities, regarding HSBC's Swiss private bank about suspected money laundering linked to it past relations in the Lebanese banking system. HSBC in its last interim report of 2025 admitted its aware of the investigation and stated it might have great implications.[9][10][11]

Client relationship changes

Due to the pressure on it by regulators, HSBC's Swiss private bank began closing accounts of over 1,000 wealthy clients located in the Middle East, informing them to move their money elsewhere. The countries include Lebanon, Saudi Arabia, Qatar, and Egypt, with people holding accounts of many of over $100 million each.[12][13]

Early in 2025 for first time in its history, the Lebanese government sued HSBC in Switzerland, claiming that HSBC did not properly check the financial activities of the Salameh brothers, who are suspected of stealing money from Lebanon's central bank.[14][15][16]

See also

References

  1. ^ "History of HSBC in the Middle East - About HSBC". www.about.hsbc.co.om. Retrieved 2025-08-25.
  2. ^ "HSBC considering sale of Lebanese unit to Lebanon's Blom Bank". South China Morning Post. 2016-07-25. Retrieved 2025-08-25.
  3. ^ a b c d e f "FINMA proceedings: HSBC Private Bank (Suisse) SA violated money laundering regulations". 2024.
  4. ^ Blackhurst, Chris. "HSBC's Lebanese troubles make the case for top-level accountability". The National. Retrieved 2025-08-25.
  5. ^ Propheta, Grace. "Switzerland probes HSBC branch over Lebanon-linked money laundering ". globalinvestigationsreview.com. Retrieved 2025-08-25.
  6. ^ "Client Challenge". www.ft.com. Retrieved 2025-08-25.
  7. ^ a b Kollewe, Julia (2024-06-18). "HSBC's Swiss private banking arm breached money-laundering rules, regulator finds". The Guardian. ISSN 0261-3077. Retrieved 2025-08-25.
  8. ^ "HSBC Switzerland breached money-laundering rules, says Swiss watchdog". Reuters. 2024-06-18. Retrieved 2025-08-25.
  9. ^ "HSBC under Swiss, French investigation for money laundering linked to Lebanon". L'Orient Today. 2025-07-30. Retrieved 2025-08-25.
  10. ^ McGachey, Kristen. "HSBC's private bank under investigation by Swiss and French authorities". www.fnlondon.com. Retrieved 2025-08-25.
  11. ^ "HSBC targeted in Swiss probe linked to Ex-Lebanon Central Banker". 2025.
  12. ^ vidhyamunnangi (2025-07-30). "HSBC Swiss private bank faces probe over alleged money laundering". Private Banker International. Retrieved 2025-08-25.
  13. ^ swissinfo.ch, S. W. I. (2025-07-30). "HSBC Targeted in Swiss Probe Linked to Ex-Lebanon Central Banker". SWI swissinfo.ch. Retrieved 2025-08-25.
  14. ^ Atallah, Nada Maucourant. "Lebanon files lawsuit against HSBC in Switzerland over Riad Salameh embezzlement case". The National. Retrieved 2025-08-25.
  15. ^ [l-updates-and-guidelines/hsbc-accused-of-turning-blind-eye-to-hundreds-of-millions-of-dollars-syphoned-out-of-lebanese-central-bank/?utm_ "HSBC accused of turning blind eye to hundreds of millions of dollars syphoned out of Lebanese central bank"]. 2025. {{cite news}}: Check |url= value (help)
  16. ^ "HSBC and the Salameh affair: alarm bells ignored for a decade". www.publiceye.ch. Retrieved 2025-08-25.
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