HSBC’s Swiss banking arm helped wealthy customers avoid tax and hide millions of dollars, according to a report by a network of investigative journalists.
The British banking giant provided accounts to international criminals, corrupt businessmen, politicians and celebrities, secret files analysed by the International Consortium of Investigative Journalists (ICIJ) show.
The documents have led to criminal investigations in several countries and attempts to get the money back after being stolen by an IT worker in 2007 and passed to authorities in France.
Details of the 30,000 accounts, which hold nearly £78bn of assets, are coming to light after the files were obtained by the French newspaper Le Monde and analysed by the ICIJ.
The files are reported to include evidence that the bank colluded with some clients to hide accounts from tax authorities in their home countries.
While holding a secret bank account is not illegal, they have been used by some to deliberately conceal assets to dodge tax, which is against the law.
“HSBC profited from doing business with arms dealers who channelled mortar bombs to child soldiers in Africa, bag men for Third World dictators, traffickers in blood diamonds and other international outlaws,” the ICIJ reported.
According to the files, the bank’s clients included former and current politicians from Britain, Russia, India and a number of African countries.
Those named in the files include people sanctioned by the US, such as Turkish businessman Selim Alguadis and Gennady Timchenko, an associate of Russian President Vladimir Putin who was the subject of sanctions over the Ukraine crisis.
HM Revenue and Customs was passed the data in 2010 and has since then clawed back £135m from some of the 3,600 Britons identified as potentially avoiding tax.
But some MPs have complained about HMRC’s perceived slow progress and the fact that only one evader has been prosecuted to date.
The bank said in a statement that since the period in question, it had “implemented numerous initiatives designed to prevent its banking services being used to evade taxes or launder money”.
“Although there are numerous legitimate reasons to have a Swiss bank account, in some cases individuals took advantage of bank secrecy to hold undeclared accounts,” the statement continued.
“This resulted in private banks, including HSBC’s Swiss private bank, having a number of clients that may not have fully met their applicable tax obligations.
“We have taken significant steps over the past several years to implement reforms and exit clients who did not meet strict new HSBC standards, including those where we had concerns in relation to tax compliance,” it added.
“We are fully committed to the exchange of information with relevant authorities and are actively pursuing measures that ensure clients are tax transparent, even in advance of a regulatory or legal requirement to do so.
“We are also co-operating with relevant authorities investigating these matters and we acknowledge and are accountable for past control failures.”
