HSBC has agreed to pay €300m (£266m) to the French authorities to settle a long-running investigation into tax evasion by French citizens via its private bank in Switzerland, details of which were first leaked by one of the bank’s former IT employees
The deal is the first to be made under a new French law introduced at the end of 2016 which allows companies to settle without any finding of guilt.
The Parquet National Financier (PNF) the national financial prosecutor’s office, said that more than €1.6bn of assets were involved in the scheme, which were ‘discovered as a result of the seizure and exploitation of computer documents found at the home in France of a former employee of HSBC in January 2009.’
The PNF confirmed that the settlement ends proceedings against HSBC provided the bank makes the payment, although it suggested that two former directors of HSBC’s Swiss private bank, whom it did not identify, could be subject to possible legal action.
In its statement, HSBC said: ‘The investigation regarding HSBC Holdings has been dismissed.
‘HSBC has publicly acknowledged historical control weaknesses at the Swiss private bank on a number of occasions and has taken firm steps to address them’.
Last year the PNF entered into negotiations with the Swiss bank UBS over similar charges that it helped clients to avoid taxes, and said it should pay €1.1bn in settlement. UBS has rejected this offer and indicated it will go to court over the issue.
At the time, UBS said: ‘UBS has made clear that the bank disagrees with the allegations, assumptions and legal interpretations being made. We will continue to strongly defend ourselves and look forward to a fair proceeding.’
In November 2015 the former IT employee, Herve Falciani, was given a five-year jail sentence in absentia for economic espionage by a Swiss court.
In the UK, the public accounts committee was highly critical of the UK’s handling of information passed over as a result of Falciani’s whistleblowing, saying in a report in 2016 that HMRC had failed to launch more legal challenges as a result of the information contained in the list of t UK taxpayers holding offshore accounts in HSBC’s private Swiss bank, while the Financial Conduct Authority had also decided against taking action against the bank.
Report by Pat Sweet
