Argentine Authorities Investigate HSBC for Alleged Money Laundering in Shell Transaction

HSBC, the global British banking giant, is under investigation for money laundering following a suspicious currency exchange transaction with Anglo-Dutch oil and gas company Shell in Argentina.

Suspicious Transaction with HSBC

On January 23, HSBC sold Shell dollars at an unusually high rate on Argentina’s state-controlled exchange market, netting the bank an unexpected profit of over $1.3 million. The rate HSBC offered, 8.7 Argentine Pesos, was far above the fixed state market rate of 7.2, earning HSBC close to $8 million in profits instead of the expected $6.7 million.

Shell’s Alleged Complicity

The Argentine Financial Information Unit (UIF) claims that Shell was aware of the irregular transaction yet failed to report it to the authorities. Later that day, Shell made several similar transactions with other banks, raising further suspicion.

Potential Money Laundering

The UIF proposes that the case be investigated for potential money laundering. Any collusion on the deal could imply that the potentially ill-gotten money was later reinvested in new transactions carried out by the bank.

Historical Context of Argentina’s Exchange Rates

Argentina’s imposition of state-controlled exchange rates has historically offered avenues for various criminal activities, including the one being investigated in Argentina.

HSBC’s Previous Money Laundering Allegations

HSBC’s alleged involvement in money laundering is not a new occurrence. In 2012, US courts penalized the bank with a fine of $1.92 billion for allowing the Norte del Valle Cartel (NDVC) of Colombia and Mexico’s Sinaloa Cartel to launder approximately $881 million. Argentina opened its own investigation into HSBC, accusing the bank of money laundering and tax evasion.

Shell’s Previous Money Laundering Allegations

Shell too has previously been linked to money laundering allegations, with UK police scrutinizing the company’s dealings with shady figures in Nigeria in 2013. However, neither corporation has faced criminal charges.

Possible Criminal Repercussions for HSBC

This latest case raises the possibility of HSBC finally experiencing criminal repercussions. Numerous practical, political, and economic obstacles must first be overcome. However, the chances of this happening remain uncertain.