HSBC could face legal action over helping clients evade millions in tax
HSBC Holdings Plc faces investigation by U.S. authorities and an inquiry by British lawmakers after revelations that their Swiss private bank may have helped some wealthy clients in Switzerland evade tax.
U.S. prosecutors have stepped up efforts to find out whether the world’s second largest bank has helped lots of Americans dodge taxes after media reports and documents seen by the Panorama show say bankers have helped wealthy customers conceal millions of dollars of assets as well as offered deals to help tax dodgers stay ahead of the law.
The International Consortium of Investigative Journalists (ICIJ), which co-ordinated the release of details of leaked client data, said a list of people who held HSBC accounts in Switzerland included football and tennis players, rock stars and Hollywood actors.
But for some watching the lender and its peers, it is a case study of a much wider problem of governments not cracking down with enough urgency on dodged tax, and a useful lesson on the short arm of international law.
John Christensen, executive director of Tax Justice Network, says HSBC was not alone in assisting rich clients in paying less tax. “It’s one among a lot of very big players,” he says. He adds that “the problem for those collecting tax is one of information exchange” and accuses the UK and other governments of “dilly dallying” on this front.
Being able to parcel wealth into offshore companies whose owners are hidden means knowing what someone has really earned and therefore how much tax they should pay is very difficult.
HSBC shares fell 2% by this Tuesday, underperforming the European bank index. They fell 1.6% on yesterday after media reports about the activities of its Swiss operation based on client data from 2006-07.
HSBC said it was cooperating with authorities investigating these matters. Authorities in France, Belgium and Argentina have said they are investigating too.