The Isle of Man branch of HSBC bank has been fined just under £300,000 by the regulator over compliance breaches.

HSBC made three payments for a client that was subject to a proceeds of crime restraining order issued by the courts and in an unconnected matter, had issued a cheque without the required consent from the Financial Intelligence Unit.

Following an investigation, the Financial Services Authority concluded it was ‘appropriate, necessary and proportionate’ for HSBC to pay a discretionary civil penalty of £419,900 discounted by 30% to £293,930.

The regulator said: ‘The authority is satisfied that the imposition of the civil penalty on HSBC appropriately reflects the nature of the contraventions by HSBC and the importance the authority places on all parties in the regulated sector, in particular banks who are critical gatekeepers, complying with all elements of AML/CFT legislation.’

The FSA noted that the bank had self-reported one of the regulatory contraventions and had proactively brought about operational changes to address the issues identified.

It said the level of the civil penalty also reflected the isolated nature of the issues, and the fact that HSBC had agreed settlement at an early stage.

In August last year, HSBC discovered that earlier the same month it had made three recurring payments for a client that was subject to a restraint order issued by the Manx courts in relation to the Proceeds of Crime Act.

The court order restrained dealing with funds in respect of specified bank accounts in the name of a client of HSBC but permitted certain monthly payments to be made.

HSBC notified the FSA of this matter following its obligations under Anti-Money Laundering and Countering the Financing of Terrorism (AML/CFT) legislation.

The following month, the regulator became aware that HSBC had issued a cheque without the required consent from the Financial Intelligence Unit.

An investigation by the FSA found that in relation to the first matter, the contravention arose because the preventative controls were not manually reapplied to the account after consented monthly payments had been made - resulting in three recurring payment transactions leaving the account.

In relation to the second, unconnected, matter involving the paying away of funds without consent, HSBC had given notice to the client that their account would be closed. But the balance was issued inadvertently by way of cheque without engaging with the Financial Intelligence Unit first.