Muscat: HSBC Bank Oman may be closing a number of accounts belonging to customers from countries that are subject to significant sanctions from the European Union, United States, or both, Times of Oman learnt on Sunday.
Disclosing this in an e-mailed statement, HSBC Bank Oman noted that the bank is committed to adopting the highest compliance standards across the Group.
When asked what had prompted the decision, HSBC said: "We must apply enhanced oversight on any customer with connections to sanctioned countries. Where we are unable to maintain sufficiently detailed information about such a customer through a relationship-managed account, we will have to discontinue that relationship."
The global banking giant confirmed that it is discontinuing some of the accounts of customers from countries that are subject to significant sanctions from the EU, US, or both. These countries have been selected according to an "internal risk assessment."
According to the US Department of Treasury, some of the countries that are subject to significant sanctions are Cuba, Iran, Sudan, and Syria.
However, this is not a blanket ban on all customers from such sanctioned countries, HSBC Bank Oman clarified. "We can confirm that the list does not include any country in which HSBC operates a branch network. This is not a blanket policy for all customers from certain sanctioned countries. As long as customers with connections to sanctioned countries satisfy our due diligence requirements for Premier or Advance [accounts], we will continue to bank with them," the statement said.
HSBC Bank Oman will soon be sending out letters to customers from countries that are subject to significant sanctions, so they can close their accounts and transfer their cash balances to an alternative bank. In the UAE, HSBC bank told affected customers that any outstanding amounts on their HSBC credit cards are now due and payable. "I was told that my HSBC credit card/s will be deactivated on March 20, 2013, so I should return/destroy any such cards," a Syrian national told Times of Oman from Dubai.
Those customers who have an HSBC or personal loan, which takes five years or so to pay, have been given the option of settling the balance in full or continuing to repay the balance via monthly instalments in the UAE.
In December 2011, the US government issued a new set of laws that were enforced in March 2012 to penalise any significant transactions by a foreign bank involving a country that was facing sanctions by threatening to close down that bank's correspondent account. This means that the bank would not be permitted to make wire transfers in US dollars anywhere in the world.
HSBC's stricter compliance approach in the region is part of a global measure to avoid penalties and improve transparency.