HSBC admits tax avoidance failings

Leaked details from bank accounts totalling £78bn in assets shows that HSBC routinely helped wealthy UK customers to avoid paying taxes.

Related topics:  Finance News
Rozi Jones
9th February 2015
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The leaked documents, obtained collectively by news organisations including the Guardian and French daily Le Monde, found that almost 7,000 Britons were hiding funds in offshore Swiss bank accounts.

According to the documents, HSBC allowed customers to withdraw lump sums of varying currencies with few questions, helped clients to conceal bank accounts from UK tax authorities, and marketed schemes known to aid in tax avoidance.

Deliberately hiding money to avoid paying tax is illegal, and the bank now faces criminal charges in the US, France, Belgium and Argentina; however no action has yet been taken in the UK.

The Bank has also come under fire for providing banking services to "high-risk" individuals, including drug dealers, relatives of dictators, and people implicated in the illegal African 'blood-diamond' trade.

HSBC acknowledged failings in its Swiss banking arm, but maintained that it has since "fundamentally changed".

In a statement, the Bank said:

"HSBC Global Private Banking and in particular its Swiss private bank have undergone a radical transformation in recent years. HSBC has implemented numerous initiatives designed to prevent its banking services being used to evade taxes or launder money.

"In the past, the Swiss private banking industry operated very differently to the way it does today. Private banks, including HSBC’s Swiss private bank, assumed that responsibility for payment of taxes rested with individual clients, rather than the institutions that banked them. Swiss private banks were typically used by wealthy individuals to manage their wealth in a discreet manner. 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 Bank also said that its Swiss arm has reduced its client base by almost 70% since 2007.

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