The price came to about 294 million euros, or $329 million. In August 2019, Bloomberg reported that HSBC’s Swiss private banking unit had agreed to that sum to end a Belgian criminal investigation, a record for Belgium. The case rested on a theft from 2008.
That year, Herve Falciani, a former IT worker at the bank, took client account details from its Geneva office and passed them to investigators. Belgian and French authorities both started looking at the Swiss unit as a result. France’s case ended with HSBC agreeing to settle for 300 million euros.
The leak behind the case
The wider public learned what was in the files in February 2015. The Guardian, Le Monde, BBC Panorama and the International Consortium of Investigative Journalists worked on the cache together. It covered 2005 to 2007 and reached some 30,000 accounts holding almost $120bn in assets, which the Guardian called the biggest banking leak in history.
The reporting said the Swiss private bank let clients walk out with bricks of cash, marketed schemes likely to help wealthy customers avoid European taxes and helped some of them hide undeclared “black” accounts from their home tax authorities. It also found accounts held for criminals, corrupt businessmen and other high-risk people.
HSBC did not dispute the core of it. “We acknowledge and are accountable for past compliance and control failures,” the bank said in a statement. It said the Swiss arm was never fully folded into the group after HSBC bought it in 1999, so compliance and due-diligence standards there stayed “significantly lower.” Action to bring the unit into line came only in 2011. By the time of the Guardian’s story, HSBC faced criminal investigations or charges in France, Belgium, the US and Argentina, but none in Britain.
Belgium’s case
Michel Claise, an investigative judge in Brussels, had charged the Swiss unit in 2014 over money-laundering allegations. Brussels prosecutors said they suspected HSBC of selling offshore companies in Panama and the Virgin Islands to certain clients so they could avoid taxes.
Five years on, prosecutors chose a settlement. In a statement they said it would save time, and they pointed to HSBC’s efforts to improve compliance, its decision to stop offering certain banking services and its readiness to pay 400,000 euros up front. The deal was preliminary. Willemien Baert, a spokeswoman for the Brussels prosecutors’ office, said a judge still had to approve it at a hearing expected in September. HSBC declined to comment.
Sources
- HSBC files show how Swiss bank helped clients dodge taxes and hide millions (The Guardian)
- HSBC Swiss unit to pay nearly $330 million to Belgian authorities in tax settlement (Bloomberg report, carried in the ACFCS Fincrime Briefing)
