The documents were stolen by computer programmer Herve Falciani in 2007 when he worked for the global bank’s Geneva branch and contain details of more than 100,000 clients from all over the world, including 7,000 Brits.
Falciani has since been on the run from Swiss authorities who believe he planned to sell the data for financial gain, however he has so far avoided capture and has been helping government authorities chase down those evading tax.
HM Revenue & Customs was one of the authorities handed the data and it has since contacted more than 6,000 people from the list who it believes have been evading tax, raising more than £135m (€182m, $205m) in the process. However, the BBC reported today that only one person has been prosecuted for an offence relating to the data.
As a result of the leaks, HSBC now faces criminal investigations in the US, France, Belgium and Argentina, but not in the UK.
Speaking to the BBC Margaret Hodge MP, chairwoman of the Public Accounts Committee which has been looking into tax avoidance and evasion by companies and wealthy individuals in the UK, said not enough was being done by HMRC.
“I just don’t think the tax authorities have been strong enough, assertive enough, brave enough, tough enough in securing for the British taxpayer the monies that are due.”
Actively helping clients
It should be noted that having an offshore account doesn’t necessarily mean a person is trying to avoid tax. However, the investigation – conducted jointly by the International Consortium of Investigative Journalists, the Guardian newspaper and BBC Panorama among others – found that not only was HSBC turning a blind eye to it, but also actively helping clients.
For example, when the European Savings Directive was introduced in 2005, the idea was that Swiss banks would take any tax owed from undeclared accounts and pass it to the taxman.
However, instead of collecting the money, HSBC wrote to customers and offered them ways to get round the new tax.
In a statement, HSBC said it has its Global Private Banking arm, specifically that based in Switzerland has “undergone a radical transformation in recent years”.
The bank explained that “in the past, the Swiss private banking industry operated very differently to the way it does today”, arguing that private banks, including HSBC “assumed that responsibility for payment of taxes rested with individual clients, rather than the institutions that banked them”.
It added: “We have taken significant steps over the past several years to implement reforms and exit clients who did not meet strict new HSBC standards, including those where we had concerns in relation to tax compliance.”
As a result of this “repositioning” HSBC said its Swiss private bank client base had reduced by almost 70% since 2007.