HSBC Targeted by Authorities over Tax Evading Clients

By Tom
Updated on

HSBC Targeted by Authorities over Tax Evading Clients

Now we are getting somewhere:

Frankfurter Allgemeine Zeitung has:

Quote: The authorities have the largest European Bank – HSBC Holdings plc (LON:HSBA) (NYSE:HBC) – in its sights: The British tax-authorities checks thousands of accounts in the bank after a loss of data. ”We get information from a number of channels to insure the tax-regulations are kept”, according to an announcement Friday from the HMRC [HM Revenue and Customs].

The exact wording according to the Telegraph on the 8th:

“We can confirm we have received the data and we are studying it. We receive information from a very wide range of sources, which we use to ensure the tax rules are being respected.

“Clamping down on those who try to cheat the system through evading taxes and over claiming benefits is a top priority for us and we value the information we receive from the public and business community.”

The Telegraph has:

Quote: The Telegraph disclosed on Friday that a whistle-blower has provided HM Revenue and Customs with full details of every HSBC client who has an account in Jersey. More than 4,000 people based in Britain, including several serious criminals who bank with HSBC in Jersey, are now embroiled in a major tax investigation.


HMRC warned it would “come down hard” on individuals evading taxes and urged anyone banking with HSBC in Jersey who had not made the necessary legal disclosures to come forward. It is expected to set up a dedicated phone line this weekend.

“We will come down hard on any evidence of tax evasion and other money laundering,” said a spokesman for HMRC. “It always makes sense to come forward and talk to us before we come to you.”

On Thursday, this newspaper disclosed that several serious criminals had been allowed to open accounts in Jersey with HSBC. The disclosures raise serious questions about the bank’s procedures in Jersey, at a time when Britain’s biggest bank is preparing to pay fines of more than $1.5?billion in America for breaking money laundering rules.

The bank is legally obliged to report to authorities any suspicions about the source of money deposited in its accounts.

But, HSBC Holdings plc (LON:HSBA) (NYSE:HBC) is not taking that lying down:

A spokesman for HSBC Holdings plc (LON:HSBA) (NYSE:HBC) said the bank would co-operate fully with the authorities. “We are investigating the reports of an alleged loss of certain client data in Jersey as a matter of urgency,” said a spokesman. “We have not been notified of any investigation in relation to this matter by HMRC, or any other authority, but, should we receive notification, we will co-operate fully with the authorities.

“HSBC remains fully committed to adoption of the highest global standards, including the procedures for the acceptance of clients.”

Well, you can’t lie down, when you are crawling on your knees……….

The Telegraph has:

HMRC is understood not to have paid for information about HSBC’s Jersey clients, but the data it has received is thought to be the single biggest disclosure of a bank’s offshore customers.

The Daily Telegraph understands that the whistleblower who has obtained the information also has further lists of offshore HSBC clients, with addresses outside Britain, including 602 in Israel, 527 in France, 333 in Spain, and 117 in the US. In total, the leaked HSBC Holdings plc (LON:HSBA) (NYSE:HBC) Jersey client list is thought to contain the names and addresses of 8,474 people. More than half are based in this country.

Further, The Telegraph has:

Article to be recommended.

But it does leave an idea:


One reason the Swiss agreed to co-operate with HMRC is that this enables Swiss banks to hang onto money that might otherwise have migrated to Liechtenstein on its way back to Britain. Under the agreement, which will run until 2015, HMRC can send 500 names of British taxpayers to the Swiss authorities each year to check if there are taxes due on accounts there.


That may be an explanation as to why the Swiss, all of a sudden, after centuries of being coy, suddenly decided to play ball. Getting information on holocaust victims’ accounts, victims that died in concentration camps, has been like pulling teeth from a sabre tooth deceased tiger! We can be assured that any moral considerations or remorse is NOT the motive.

Now I don’t necessarily believe Mr. Cowie in The Telegraph; but he is the first that has come forward with anything resembling an explanation.

The mystery is HOW tax authorities in various countries have been able to “persuade” international banks to cough up that sort of information. Leading figures must be under severe strain.

To my conspiratorial mind these actions (reasonably well simultaneous and coordinated) have the distinct flavor of “anti-terror” investigations of money transfer and laundering that turns up collateral information. To the US, the odd billion in tax evasion definitely takes backseat to placing a ton of bricks (literally – as precision of modern bombs is so high that ordnance in some cases prefer to do without explosives) on a very unpleasant person.

To a European frame of mind tax-evasion is the priority. Take this as an indication that pooling information might get both parties a benefit, though their priorities are different. Barack Obama would sell his wife’s virtue to get at Al-Quaeda and Merkel would swap Greek holiday resorts for tax evasion information. Maybe both parties found out that the price might not actually be that high given a bit of cooperation?

To be quite honest I don’t think it stops there: One thing leads to another. Though the CIA (or whomever) might be interested primarily in anti-terror they will pass on information about tax-evasion (recovered collaterally) to the IRS – and vice versa: Information about terrorist “initiatives” in Europe. Most certainly there has been a marked increase in terror prosecutions – and convictions in the “shire” of recent. The “shire” tax authorities have also written to 800 persons, that coming clean would not give them clemency, as they were already under investigation. The updated version of: “Well if you can’t come up with something that is VERY interesting – well, then a conviction for jaywalking will have to do.”

Intelligence, tax-authorities, and police are very hard to fight once they get their act together across the sea. My personal prediction is that this will keep rolling to and fro for years. We see old KGB bookkeepers recognizing their handwriting on old photocopies of old fashioned secret manual ledgers. Can you imagine a bureaucrat NOT minding his/hers precious posterior with photocopies? A bank clerk that is not willing to rat his clients out to avoid jail time?

Memory is a strange commodity. Conspiracy? I prefer to call it interdepartmental cooperation – sounds much nicer.


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