Home Breaking News HSBC helped wealthy clients across world evade hundreds of millions of dollars

HSBC helped wealthy clients across world evade hundreds of millions of dollars


According to new reports, HSBC helped wealthy clients across the world evade hundreds of millions of dollars worth of tax.

Accounts from 106,000 clients in 203 countries were leaked by whistleblower Herve Falciani in 2007.

HSBC admitted that some individuals took advantage of bank secrecy to hold undeclared accounts. But it said it has now “fundamentally changed”.

The banking giant now faces criminal investigations in the US, France, Belgium and Argentina.

HSBC said it is “co-operating with relevant authorities”. However, in the UK, where the bank is based, no such action has been taken.

Offshore accounts are not illegal, but many people use them to hide cash from the tax authorities. And while tax avoidance is perfectly legal, deliberately hiding money to evade tax is not.

India’s finance minister Arun Jaitley has said that all Indian names on the list will be investigated, although he cautioned that some accounts might be legitimate. A current inquiry looking into more than 600 people who hold accounts overseas, will now be widened to look into the current list of names.

Photo Reuters

Photo Reuters

The French authorities concluded in 2013 that 99.8% of their citizens on the list were probably evading tax.

The thousands of pages of data were obtained by the French newspaper Le Monde. In a joint investigation, the documents have now been passed to the International Consortium of Investigative Journalists, The Guardian and more than 50 media outlets around the world.

HSBC did not just turn a blind eye to tax evaders – in some cases it broke the law by actively helping its clients.

The bank gave one wealthy family a foreign credit card so they could withdraw their undeclared cash at cashpoints overseas.

HSBC also helped its tax-dodging clients stay ahead of the law.

When the European Savings Directive was introduced in 2005, the idea was that Swiss banks would take any tax owed from undeclared accounts and pass it to the taxman.

It was a tax designed to catch tax evaders. But instead of simply collecting the money, HSBC wrote to customers and offered them ways to get round the new tax.

HSBC denies that all these account holders were evading tax.

Meanwhile, HSBC said it has completely overhauled its private banking business and has reduced the number of Swiss accounts by almost 70% since 2007.

In a statement, the bank said: “HSBC has implemented numerous initiatives designed to prevent its banking services being used to evade taxes or launder money.”

HSBC said it now puts compliance and tax transparency ahead of profitability.

[youtube rlg64vr0DXs 650]

Clyde is a business graduate interested in writing about latest news in politics and business. He enjoys writing and is about to publish his first book. He’s a pet lover and likes to spend time with family. When the time allows he likes to go fishing waiting for the muse to come.