A bank that proudly does business in Iran
The international bank HSBC says it is pulling an ad that juxtaposes a plug for the bank's ability to find "potential in unexpected places" with a factoid about Iran: "Only 4% of American films are made by women. In Iran it's 25%."
A reader e-mailed me about the ad last week. The implication that Iranian women -- who are tortured, beaten, murdered and imprisoned for exercising rights of free speech -- are better situated than their American counterparts was simply preposterous.
When I contact HSBC on Thursday, spokesman Robert Sherman denied that the ad suggested the bank was exploring investment opportunities in Iran. "The ad makes no such statement," he claimed via e-mail. Why bring up Iran then?
As for the comparison of women filmmakers in Iran and the U.S., Sherman offered this justification:
HSBC offers no opinion on the lives of artists in any country. This is not a topic that's germane to an ad campaign for a global bank. The ad needs to be considered in the context of our "Unlocking the World's Potential" campaign. As with our prior "Values" campaign, this campaign intentionally makes no judgment. The intent is only to emphasize surprising facts based on geographic diversity, as a way to facilitate a conversation about the world's potential. Other surprising facts featured in this campaign: Holland earns more exporting soy than Japan; USA has more Spanish language newspaper readers than Latin America.
A "surprising fact" not in the ad was reported last week by The Post : "Prominent Iranian director Jafar Panahi was sentenced to six years in prison and banned from making films, writing scripts, giving interviews and traveling abroad for the coming 20 years, his lawyer said Tuesday." But I suppose that comparing the number of Iranians (is it in the hundreds? thousands?) jailed for artistic "crimes" with Americans in the same situation (zero) would not help the bank hawk business in the Middle East or even with anti-American elites in Europe.
The U.S. State Department's human rights report provides more facts about Iran not in the ad:
The government censored cultural events with stringent controls on cinema and theater and a ban on Western music. A 2006 NGO report noted that censorship by authorities and a culture of self-censorship strongly inhibited artistic expression in the country. The government monitored cultural associations and continued to crack down on underground music groups (i.e., any group that failed to obtain a recording license from the Ministry of Culture and Islamic Guidance), especially those it considered inspired by Satan such as heavy metal or other Western-type music....
As the main source of production funding, the government effectively censored domestic filmmaking. Producers were required to submit scripts and film proposals to government officials in advance of funding approval. Movies promoting secularism, feminism, unethical behavior, drug abuse, violence, or alcoholism were illegal, and some domestic directors were blacklisted. The government prevented distribution of citizen Bahman Ghobadi's film on censorship, No One Knows About Persian Cats.
Josh Block, a senior fellow at the Progressive Policy Institute and a principal at the consulting firm Davis-Block (also a long-time advocate of sanctions against Iran), had this response to my inquiry about the ad:
It defies logic and common decency that HSBC would engage in this outrageous pro-Iran, anti-American propaganda at a time when the regime in Tehran is the leading human rights violator and state sponsor of terror in the world. I wonder what the noted Iranian human rights dissident Shirin Ebadi, or Sakineh Ashtiani - who was sentenced to death by stoning in Iran, or the mothers of those who the regime has murdered in its torture dungeons at Evin Prison and other hell holes we never even heard of, would think about this ad? When HSBC Bank says "we find potential in the most unexpected places" they are obviously quite serious. I think they are likely provoking outrage in some highly expected places with this ad, as well. Namely all across the United States of America, and in particular at the Treasury Department and up on Capitol Hill.
A day after I contacted HSBC, I received a follow-up e-mail from Sherman that read: "The ad was meant to encourage debate and discussion, and we certainly did not intend to cause offense. Subsequent to hearing some recent concerns, we are removing the ad from our global campaign."
The number of complaints was tiny, according to a source at the bank, which makes me wonder whether the prospect of this report contributed to the change of heart.
As to HSBC's Iran operations, the bank contends: "HSBC's Iran policy remains the same: no new deals, no activity not permitted under existing sanctions. We continue to follow the letter and spirit of laws, regulations and sanctions related to Iran, in all jurisdictions." In other words, the bank continues to have existing business in Iran.
It is not clear precisely what business activity HSBC continues to conduct in Iran. What we do know from SEC filings is that the bank maintains an office in Iran. And it scaled back some of its activities there in 2007, in response to growing concern about Iran's activities and actions by the U.S. Treasury Department.
But of late, HSBC's practices have drawn the attention of various regulators. The bank is being probed by the U.S. Department of Justice and the U.S. Attorney's Office. It has hired Deloitte to examine transactions related to a money laundering investigation. And the Federal Reserve Bank of Chicago and the Office of the Comptroller of the Currency issued a "cease and desist" order to HSBC's North American unit in October, ordering the bank to enhance its risk management procedures. Regulators found that the bank's compliance program was ineffective and created "significant potential" for money laundering and terrorist financing. This opened HSBC to the possibility that it was conducting transactions on behalf of sanctioned entities. The cease and desist order did not impose any penalty on the company, but it required HSBC to take several steps to ensure full compliance with the Bank Secrecy Act and other financial regulations.
Moreover, Rep. Frank Pallone (D.-N.J.) recently wrote to Federal Reserve Chairman Ben Bernanke calling for increased enforcement of prohibitions on banks and other financial institutions doing business with Iran, and citing HSBC as an example of part of the problem. Rep. Joe Baca (D.-Calif.) sent a similar letter.
A spokesman for House Foreign Affairs Committee chairwoman Ileana Ros-Lehtinen indicated that issues raised by the HSBC ad would be reviewed. He reiterated that for the congresswoman, "Full enforcement and implementation of sanctions laws has been and will continue to be a top priority."
A Treasury Department spokesperson could not be reached for comment. But Stuart Levey, the Treasury undersecretary in charge of financial sanctions, testified before the House Foreign Affairs committee earlier this month and detailed laborious efforts to expose Iranian banks and companies involved in illicit activities and to persuade banks in the U.S. and Europe to cease activities that might facilitate Iran's nuclear or terrorist activities. Levey explained:
The vast body of public information demonstrating the scope of Iran's illicit conduct and deceptive practices -- practices that have facilitated its proliferation activities -- makes it nearly impossible for financial institutions and governments to assure themselves that transactions with Iran could not contribute to proliferation-sensitive activity....
What we are seeing thus far is very positive - even banks that had been willing to maintain accounts for designated Iranian banks are now reversing course or cutting ties with Iran altogether. Nevertheless, we know that Iran continues to search for work-arounds, and we must and will remain vigilant in enforcing this law....
In the course of our travels, we have encountered a growing number of financial institutions, driven by increased awareness of Iran's illicit and deceptive conduct, that are shying away from doing any kind of business with Iran. Many institutions have simply stopped dealing with Iranian banks altogether, in light of Iran's established history of using deceptive financial practices to mask the real nature of, or the true parties involved in, their transactions.
But not HSBC. No, sir. Its execs are certain all is in order. So while other banks and businesses are pulling out of Iran, HSBC's policy "remains the same." What's more, it doesn't make "value judgments." But by continuing to do business with a murderous regime, the bank certainly is displaying its corporate values.
| December 26, 2010; 12:00 PM ET
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