EU Economy
Belgium accuses HSBC Private Bank of money laundering/ tax evasion
By Finfacts Team
Nov 18, 2014 - 7:36 AM

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The HSBC group evolved from the Hongkong and Shanghai Banking Corporation Limited, which was founded in 1865 in Hong Kong with offices in Shanghai and London. The group expanded primarily through offices established in the bank's name until the mid-1950s when it began to create or acquire subsidiaries. This strategy culminated in 1992 with one of the largest bank acquisitions in history when HSBC Holdings plc acquired the UK's Midland Bank plc - now called HSBC Bank plc. The group is headquartered in London.

Belgium has accused HSBC Private Bank, a unit of teh giant global bank which is based in Switzerland, with money laundering by helping wealthy Belgians to avoid taxes.

Prosecutors claim that hundreds of clients - including diamond dealers in Antwerp - moved money to the offshore tax havens of Panama and Panama and the British Virgin Islands with the assistance of the bank.

To avoid incurring  a 35% tax in Belgium, clients were advised to shift the money from Switzerland to the tax havens.

In a statement, Belgian authorities accused HSBC of "having knowingly eased and promoted fiscal fraud by making offshore companies available to certain privileged clients" - the purpose of these companies is tax evasion the statement said.

Several billion euros are believed to be involved and the FT says that last year Belgian police raided the homes of 20 people with HSBC Swiss private bank accounts as part of the investigation. The raids, which took place in Brussels and Antwerp, were aimed at gathering evidence for the case against the bank.

A person familiar with the situation said the investigation stems from 2006 when Hervé Falciani, a former IT employee at HSBC in Geneva, allegedly stole Swiss bank data which unearthed the names of suspected fraudsters and tax evaders.

HSBC said in a statement “HSBC Private Bank (Suisse) SA has been notified that it has been placed under formal investigation by a Belgian judge who, along with the French authorities, is examining whether the bank acted appropriately in the past in relation to certain clients who had Belgian tax reporting requirements.”

“We will continue to co-operate to the fullest extent possible,” it added.

The giant bank was a party in last week's forex fraud settlement of $4.3bn and in December 2012 it settled a US charge of  money laundering

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