South Korea’s financial regulator plans to conduct spot checks on the local operations of Standard Chartered and HSBC Holdings over money laundering allegations against the lenders in other countries.
The Financial Supervisory Service (FSS) said in a statement on Thursday it will conduct checks on HSBC and Standard Chartered’s Korean units after allegations were raised against the banks in the United States and Mexico. It did not specify when the checks would take place.
The regulator noted that HSBC’s Mexican unit was fined last month after failing to report suspicious financial transactions related to the drugs trade,and the bank’s U.S. unit is reportedly under investigation over money laundering allegations. The FSS also noted Standard Chartered’s New York branch is being investigated over deals tied to Iran.
An FSS official,who declined to be named,said the regulator is likely to conduct the checks on HSBC and Standard Chartered late this month after reviewing documents to see whether their Korean units may have been involved in similar activities.
A spokesperson for Standard Chartered said the bank’s Korean operations were not involved in the alleged activities. HSBC officials could not immediately be reached for comment.