Washington, Jul 17 (IANS): US Senate investigators have accused global banking giant HSBC of failing to prevent billions of dollars worth of money transfers linked to drug cartels and terrorist groups.

HSBC failed to review thousands of suspicious transactions and properly vet clients over the past decade, Senate's Permanent Subcommittee on Investigations said in a report released Monday.

Among other issues, the report notes that in 2007 and 2008, HSBC's Mexico unit shipped $7 billion in cash to the bank's US affiliate, a volume of shipments that law enforcement officials said could reach that size "only if they included illegal drug proceeds."

HSBC Mexico had a number of high-profile clients linked to drug trafficking, the report said, as well as "a huge backlog of accounts marked for closure due to suspicious activity, but whose closures were delayed."

The subcommittee also found that HSBC worked extensively with Saudi Arabia's Al Rajhi Bank, some owners of which have been linked to terrorism financing, according to CNN.

Some evidence suggests Al Rajhi's "key founder" was "an early financial benefactor of al Qaeda," the report said.

HSBC's US affiliate supplied Al Rajhi with nearly $1 billion worth of US banknotes up to 2010, and also worked with two banks in Bangladesh that some evidence links to terrorism financing as well.

"From an oversight perspective, the failure of accountability here is dramatic," Senator Carl Levin, chairman of the subcommittee, said Monday.

The report also said HSBC's US affiliate handled nearly 25,000 transactions involving Iran between 2001 and 2007, despite US sanctions against the country.

Other HSBC affiliates making transfers to the US frequently stripped information from the transactions that linked them to Iran in order to evade scrutiny.

Some HSBC executives in the US were aware of this practice as far back as 2001, the report said.