HSBC: Swiss bank searched as officials launch money-laundering inquiry

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Investigation into suspected ‘aggravated money laundering’ comes after Belgium and France begin scrutinising tax affairs of Europe’s biggest bank

HSBC private bank in Geneva, Switzerland. Photograph: Harold Cunningham/Getty Images
Jill Treanor

Wednesday 18 February 2015 21.29 AEST Last modified on Wednesday 18 February 2015 23.41 AEST



Pressure on HSBC mounted on Wednesday when prosecutors in Switzerland announced a money-laundering investigation into its Geneva-based private banking subsidiary and raided its offices in the city.

Prosecutors said the investigation into “suspected aggravated money laundering” was prompted by “the recent published revelations” about the private bank. The revelations, by the Guardian, the BBC, Le Monde and other media outlets, showed that HSBC’s Swiss banking arm turned a blind eye to illegal activities of arms dealers and helped wealthy people evade taxes.

A search was being led by the prosecutor-general, Olivier Jornot, and the first prosecutor Yves Bertossa. The inquiry could later be extended to people suspected of committing or participating in money laundering, prosecutors said.

The investigation in Switzerland comes after inquiries in Belgium and France. French authorities have recovered £188m in taxes and fines from a list of 3,000 clients and Spain has recovered £220m, also from 3,000 clients.

The UK has faced criticism for prosecuting just one out of the 1,000 individuals whose details were contained in the cache of documents obtained by Hervé Falciani, a former employee of the bank.

Those files were the basis of last week’s reports by the Guardian and a collaboration of news outlets around the world about the scale of the tax avoidance operation being run by the bank’s Swiss subsidiary.

Prosecutors in Switzerland said the investigation followed those revelations, which showed how HSBC’s Swiss arm allowed clients to withdraw “bricks” of cash and helped clients conceal their accounts from domestic tax authorities.

Prosecutors said they were targeting the bank under a law that allows companies to be investigated independently of whether any employees are culpable “if it can be accused of not having taken all the organisational measures necessary” to prevent violations of the law.

Last year, Swiss authorities indicted Falciani on charges of data theft and said they may try him in absentia.

HSBC said: “We have co-operated continuously with the Swiss authorities since first becoming aware of the data theft in 2008 and we continue to cooperate.”

The revelations have caused a political row in Britain. The opposition Labour party has called on the chancellor, George Osborne, to answer questions about why there have been so few prosecutions by HM Revenue & Customs after it received the files hacked by Falciani in 2010.

HMRC identified more than 1,000 tax evaders after receiving the files and recovered £135m in repayments, but only one person was prosecuted.

A petition calling for the UK to investigate the affair is two-thirds of the way to towards its target of attracting 1m signatures.

The shadow chancellor, Ed Balls, has also called on the Osborne to explain why he and David Cameron gave HSBC chair Stephen Green a Tory peerage and appointed him trade minister “several months after the government was given information from the French government in May 2010”.

Green has so far refused to comment on the allegations, which covered his period at the helm of the bank, first as chief executive and later as chair.

Over the weekend, Stuart Gulliver, chief executive of the bank, issued an apology through some national newspapers in the UK. He has not yet spoken publicly about the scandal but will face questions about it when he presents the bank’s full year results in London on Monday.

Senior executives from the bank – including chairman Douglas Flint – are due to appear next Wednesday before a committee of parliamentarians in London to demonstrate that the culture of the bank has been overhauled.

http://www.theguardian.com/news/201...-as-officials-launch-money-laundering-inquiry