20200927 The FinCEN Files - misleading the public and benefiting from criminal conduct: Page 6 of 10

20200927 The FinCEN Files - misleading the public and benefiting from criminal conduct

Nigel Morris-Cotterill

There is, at present, a state of excitement amongst the media, some financial crime consultants and some politicians in response to what they are being told is public opinion.

The so-called FinCEN Files were heavily telegraphed in a media blitz more akin to the launch of a Hollywood film that has cost a fortune but the result isn't as good as was hoped.

In the USA and the UK, mainstream media outlets have published a series of articles that, they say, arise because of what it has found in documents obtained from the USA's Financial Intelligence Unit, FinCEN.

The articles demonstrate a fundamental lack of understanding of how regulation works in an international environment

One article refers to the appointment of "monitors" at HSBC in New York as part of a settlement with the authorities there.

Those monitors complained that they were not immediately welcome when they went to London and Hong Kong.

The article admits that the monitors had no jurisdiction outside the US but it's more than that: HSBC in the USA is a subsidiary; it is not the headquarters.

Also, the monitors are not regulators: the extent of what is it permissible to show them will be defined by the regulators in the countries they visit.

They might have imagined they were working on something like the Financial Services Authority's Project Trident but Project Trident was when the UK's then regulator decided to inspect overseas branches and subsidiaries of UK headquartered banks. It's not the same at all.

The over-riding impression left is that monitors were obstructed which by definition means that the article takes the view that, despite the disclaimer, the monitors were entitled to unrestricted access to any part of the Group that they wanted.

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