The US Department of Justice has cleared HSBC from money laundering criminal charges by dismissing the Deferred Prosecution Agreement it struck with the bank in 2012.

The move clears HSBC from money-laundering charges that were looming over the bank since five years when it had to pay a £1.4bn in 2012 for assisting drug cartels launder money in Mexico, and defying sanctions by doing business with Iran.

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The DPA signed on 11 December 2012 has now expired. The DoJ will file a motion with the US District Court for the Eastern District of New York seeing the dismissal of the charges deferred by the agreement, the bank said.

“HSBC is working to ensure that the reforms it has put in place are both effective and sustainable over the long-term and given the increasing sophistication of criminal networks that seek to circumvent banks’ controls,” the bank’s chief executive Stuart Gulliver said.

The DoJ could have potentially renewed the DPA, but it did not do so after HSBC honoured its commitments on Monday. The DoJ has extended the DPA for Standard Chartered bank on two previous occasions.

Gulliver said: “HSBC is able to combat financial crime much more effectively today as the result of the significant reforms we have implemented over the last five years.

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“We are committed to doing our part to protect the integrity of the global financial system, and further improvements to our own capability and contributions toward the partnerships we have established with governments in this area will remain a top priority for the Bank into 2018 and beyond.”