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  1. Swiss leaks: HSBC admits to weak compliance in past

Swiss leaks: HSBC admits to weak compliance in past

With a global leak revealing tax evasion through offshore accounts in its Swiss branch, UK-based global banking giant HSBC...

By: | London | Updated: February 9, 2015 6:47 PM
swiss account list, swissleaks, black money, black money probe

ICIJ claims that HSBC, which is headquartered in London and has offices in 74 nations and territories on six continents, first insisted that the data be destroyed before issuing a statement. (Reuters)

With a global leak revealing tax evasion through offshore accounts in its Swiss branch, UK-based global banking giant HSBC admitted there have been lapses in the past on its part.

“We acknowledge that the compliance culture and standards of due diligence in HSBCs Swiss private bank, as well as the industry in general, were significantly lower than they are today,” HSBC said.

“The bank has 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. As a result of this repositioning, HSBCs Swiss private bank has reduced its client base by almost 70 per cent since 2007,” it added.

Former and current politicians from India are among international clients helped by HSBC to evade taxes with offshore accounts in Switzerland, according to leaked documents revealing the inner workings of HSBCs Swiss private banking arm.

The Narendra Modi led government in India had made it an election pledge to trace and bring back the missing millions held corruptly in Swiss accounts. The list of Indians on the leaked list handed over to the government is being estimated at over thousand.

The documents also reveal that 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 documents, stolen in 2007 by a computer expert working for HSBC in Geneva, contain details of more than 100,000 clients from around the world and was obtained by the French newspaper Le Monde.

In a joint investigation, the documents have now been passed to the International Consortium of Investigative Journalists (ICIJ), the ‘Guardian’ newspaper, BBCs ‘Panorama’ and more than 50 media outlets around the world.

“The secret files are a version of the ones the French government obtained and shared with other governments in 2010, leading to prosecutions or settlements with individuals for tax evasion in several countries.

“Nations whose tax authorities received the French files include the US, Spain, Italy, Greece, Germany, Britain, Ireland, India, Belgium and Argentina,” said the ICIJ report.

“Clients who held HSBC bank accounts in Switzerland include former and current politicians from Britain, Russia, Ukraine, Georgia, Kenya, Romania, India, Liechtenstein, Mexico, Lebanon, Tunisia, the Democratic Republic of the Congo, Zimbabwe, Rwanda, Paraguay, Djibouti, Senegal, Philippines and Algeria,” it added.

ICIJ claims that HSBC, which is headquartered in London and has offices in 74 nations and territories on six continents, first insisted that the data be destroyed before issuing a statement.

The bank now faces criminal investigations in the US, France, Belgium and Argentina and says it is cooperating with the authorities.

Experts conservatively estimate that USD 7.6 trillion is held in overseas tax havens, costing government treasuries at least USD 200 billion a year.

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