HSBC Admits Its Swiss Bank Failed to Collect Client Taxes

This article was last updated on April 16, 2022

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In response to media allegations that its Swiss subsidiary had conspired with wealthy customers to dodge European taxes and conceal millions of dollars of assets, British bank HSBC Holdings Plc. confessed in a press statement issued on Sunday it had indeed failed to comply with the rules. According to the statement issued by the HSBC on Sunday, it said “we acknowledge and are accountable for past compliance and control failures.”

The allegations were laid by a French newspaper, Le Monde, and Britain’s The Guardian citing documents obtained by the International Consortium of Investigative Journalists (ICIJ) via Le Monde. HSBC explained that its Swiss arm had not been fully integrated into HSBC after its purchase in 1999, which allowed it to operate at a “significantly lower” standards of compliance and due diligence to persist. In its reports, The Guardian pointed out that files show HSBC’s Swiss bank routinely allowed clients to withdraw “bricks” of cash, often in foreign currencies which were of little use in Switzerland, marketed schemes which were likely to enable wealthy clients to avoid European taxes and colluded with some to conceal undeclared accounts from domestic tax authorities.

In a detailed four-page statement, HSBC pointed out that the Swiss private banking industry, well known for its secrecy, operated differently in the past and this may have resulted in HSBC having had “a number of clients that may not have been fully compliant with their applicable tax obligations.” Its private bank, especially its Swiss arm, had undergone “a radical transformation” in recent years.