The committee is concerned that HSBC cleared large amounts of travellers'
checks over a number of years, without proper anti-money laundering
controls, despite evidence of suspicious activity.
Between 2005 and 2008, HBUS cleared $290m worth of US dollar travellers'
cheques which were being presented at a Japanese bank.
The daily transactions were worth up to half a million dollars, with large
blocks of sequentially numbered cheques being handed over.
After prompting from US regulators, HBUS found out that the travellers'
cheques were being bought in Russia - a country at high-risk of money
laundering.
We're not talking about a fine for executives laundering money, we're talking about fines about 'a lack of proper anti-money laundering controls, despite evidence of suspicious activity'. This is weasel-speak for 'we found something suspicious but can't prove anyone important was involved.'
The decision-makers who would have seen this 'evidence' would probably be layers removed from HSBC top management. That executives are being blamed for this in the court of public opinion is part of the reason why companies are turning to massive Orwellian computer systems to monitor all financial activity.
[+] There exists a tax on automobiles which increases with age and which, fairly quickly, causes the tax to cost more than the residual value of the automobile. It is justified as a public safety measure, since you get an inspection when paying the tax, but is actually a straight-out subsidy to domestic car manufacturers, since it essentially mandates "Despite the fact that your products work for decades, customers are required to buy a new model every 6 years."
[Edit: I should add that while Hokuriku doesn't give one the impression of being impressively well-organized from the notes in the Senate investigation that my tiny bank in central Japan believes in KYC so much that their manager-at-the-time both successfully intuited "Patrick is seeing someone." and "Patrick has broken up with his girlfriend." from changes in my cash withdraw patterns and wrote these observations down in their log just in case the next manager needed them. I have many fun anecdotes from working with them, like the time my gym botched a withdraw request and received a blisteringly polite note in Japanese saying that no one with the specified name had an account at the bank and if, hypothetically speaking, the gym had business with one of the bank's customers then it should, hypothetically speaking, extend him the common courtesy of spelling his name right.]
Seems like they got fined for being super shady.
Actually, I'll save you the effort that you didn't bother to spend yourself, and tell you what it means, to the best of my understanding.
HSBC affiliates (not HSBC itself) in some countries were processing certain transactions that were exempt from a certain regulatory requirement concerning transferring money to people designated to be terroists. HSBC built a computer system to enforce this regulatory requirement. The affiliates omitted information in internal reports to avoid triggering the computer filter for these transactions, and HSBC was like "can you include this information?" and the affiliates were like "no, these transactions are exempt". This is what the quote refers to.
So this quote is blaming HSBC for not demanding other banks file transactions internally in a way they weren't required to so as to not automatically trigger a computer system they weren't required to automatically trigger. It is this practice that Congress is calling 'deceptive'. The committee doesn't identify to what extent this is a crime, probably because none of the transactions were identified by the committee as violating the regulation that nobody--not HSBC, not Congress--was requiring them to follow.
Years later this practice would be described as "money laundering" and "sanctions evasion". However it was in reality just a reasonable way to tackle an unreasonable problem.
[1] http://www.bloomberg.com/news/2012-12-12/hsbc-mexican-branch...
Yes.