HSBC tax evasion scandal
February 9, 2015
According to a report released on Sunday, files analyzed by 140 reporters in the International Consortium of Investigative Journalists (ICIJ) have revealed that British banking giant HSBC provided accounts to international criminals, corrupt businessmen, politicians and celebrities.
"HSBC profited from doing business with arms dealers who channeled mortar bombs to child soldiers in Africa, bag men for Third World dictators, traffickers in blood diamonds and other international outlaws," ICIJ reported.
Following the release of allegations by various media outlets including German newspaper Süddeutsche Zeitung, France's Le Monde and Britain's The Guardian, HSBC said on Sunday: "We acknowledge and are accountable for past compliance and control failures.
In its defense, the British bank added that following its purchase in 1999, the Swiss arm had not been fully integrated into HSBC, consequently allowing "significantly lower" standards of compliance and due diligence to persist.
Sanctioned names
According to the files, clients of the Swiss subsidiary included former and current politicians from Britain, Russia, India and a range of African countries.
Names among the cache of secret files included people sanctioned by the US, including Turkish businessman Selim Alguadis and Gennady Timchenko - an associate of Russian President Vladimir Putin targeted by sanctions over Ukraine.
Former Egyptian Trade Minister Rachid Mohamed Rachid, who fled Cairo during the 2011 uprising against former President Hosni Mubarak, is also reported to have been listed as having power of attorney over an account worth $31 million (about 27,000 million euros).
Other individuals named include Rami Makhlouf, cousin of Syrian President Bashar al-Assad, and Frantz Merceron, an associate of former Haitian president Jean Claude "Baby Doc" Duvalier.
Account details downloaded in 2006, 2007
The data was supplied by Herve Falciani, a former IT employee of HSBC's Swiss private bank. According to HSBC, Falciani downloaded details of accounts and clients in late 2006 and early 2007.
Falciani, who previously told Reuters news agency that he is a whistleblower trying to help governments track down citizens who used Swiss accounts to evade tax, has been charged in Switzerland with industrial espionage and breaching the country's secrecy laws.
According to the ICIJ, the files at the center of Sunday's allegations are a version of a set held by the French government which was shared with other states including Argentina in 2010.
In November last year, the Argentina's inland revenue service AFIP charged HSBC with helping more than 4,000 Argentines evade some $3 billion (2.4 billion euros) in taxes.
ksb/cmk (Reuters, AFP)