The United States Treasury has an unhealthy propensity to poke around in what it considers to be the dirty washing of everyone else in the world.
Now Mr. Woo is busy in Hong Kong.
We have reached the height of banking absurdity when, to protect the US financial system, the erstwhile world’s local bank — HSBC — will only provide a safe deposit box on condition that it has unlimited power to access the contents of this misnamed “safe” box, to determine in its own unfettered discretion whether the contents are illegal or “of an offensive nature” and to dispose of the contents at the customer’s expense.
This, the unsigned computer-generated communication laughingly informs us is how HSBC “actively contributes to the provision of safe and stable services to our customers”.
The inherent contradictions appear not to trouble Stuart Gulliver: manifestly, the box is no longer safe and the stability of the previous contractual relationship has been utterly destroyed.
HSBC’s legal advisers would do well to inform them that judges determine illegality, not bankers.
As for the justification that HSBC has updated its Conditions of Lease “to reflect a globally consistent approach to sharing customer information”, what tiny mind conceived of the idea that we want to share information about the contents of our safe boxes with anyone else, God forbid with a global audience.
The key lies in the passage in the letter that reads “Banks are increasingly required to put stronger checks in place to ensure the stability of the global finance system… and comply with international sanctions…”
It is not rocket science to detect the US Treasury’s rabid hand behind this anodyne claptrap that has HSBC running scared.
Having settled with the US for US$1.9 billion and a deferred sentence as well as a US$470 million fine for abusive mortgage practices, HSBC’s directors are shivering in their crocodile skin loafers and I can understand why.
However, the bank’s criminally incompetent governance is no justification for imposing absurd conditions on its innocent customers.
Yet, what on earth can I store in my un-safety deposit box that will destabilize the global finance system?
A cartoon of the Turkish president would doubtless offend Erdogan but it is unlikely to cause a fall in the value of the lira.
Whatever may be offensive to Gulliver’s sensitive soul, what business is it of his to judge?
The day when any banker, arguably the most despised of all occupations, is empowered to rule on what is and is not offensive, truly we will have gone through the bottom of the barrel of moral depravity.
One does not have to look far to find the source of the problem.
Under the provisions of section 311 of the US Patriot Act, the US Treasury’s Financial Crimes Enforcement Network (FinCOM) uses its muscle to reach into individual bank accounts way beyond America’s geographical boundaries.
A relevant passage from section 311 reads: “Once the Secretary determines that a foreign financial institution is of primary money laundering concern, the Secretary has the authority to require domestic financial institutions and financial agencies to take certain special measures against the entity of primary money laundering concern.”
The notes to section 311 explain that it provides “a range of options that can be adapted to target specific money laundering and terrorist financing risks most effectively. These options provide the Treasury Department with a powerful and flexible regulatory tool to take actions to protect the US financial system from specific threats.”
How, one may reasonably ask, can it have such extra-jurisdictional powers?
How the US government treats its own citizens wherever they are in the world is a matter for them.
But its cavalier deployment of power so as to impact on the private banking arrangements of non-US citizens outside its territorial jurisdiction is a matter of great concern, not least to us in Hong Kong.
The answer lies in the incredible extent of inter-dependent relationships in a globalized world.
Section 311 puts the bite on all US domestic financial institutions and as virtually every US dollar-denominated transaction will eventually have to be transacted through such institutions, the rest of the world’s banks are cowed into submission.
As with any institution, FinCOM can abuse its powers and it undoubtedly did when it pressured the government of Andorra to close down the Bank of Andorra, freezing everyone’s account and making unsubstantiated defamatory allegations against its shareholders.
Faced with a lawsuit by the bank’s major shareholders and unable to justify its draconian actions, FinCOM abruptly dropped its claim that the bank was a “primary money laundering concern”.
By then, severe damage had been inflicted on all the innocent account holders.
The anti-money laundering legislation in both the UK and Hong Kong has draconian powers.
Our own Court of Final Appeal justifies them on the grounds that catching money launderers is a difficult task.
Preventing or punishing such crimes is plainly laudable but the average man or woman struggling to overcome the multiple hurdles of opening an ordinary bank account can be forgiven for cynical anger when all these legal provisions do not appear to have deterred leading politicians from plundering 1MDB of many millions or any of the other world leaders scamming their people for billions.
With a mote that big, HSBC will never see the tiny beam in the eye of its customer.
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