| Click for the Finfacts Ireland Portal Homepage |

Finfacts Business News Centre

Home 
 
 News
 Irish
 Irish Economy
 EU Economy
 US Economy
 UK Economy
 Global Economy
 International
 Property
 Innovation
 
 Analysis/Comment
 
 Asia Economy


Finfacts changes from 2015

RSS FEED


How to use our RSS feed

Follow Finfacts on Twitter

 
Web Finfacts

See Search Box lower down this column for searches of Finfacts news pages. Where there may be the odd special character missing from an older page, it's a problem that developed when Interactive Tools upgraded to a new content management system.

Welcome

Finfacts is Ireland's leading business information site and you are in its business news section.

Links

Finfacts Homepage

Irish Share Prices

Euribor Daily Rates

Global Cost of Living

Irish Tax - Income/Corporate

 

Feedback

 

Content Management by interactivetools.com.

News : Global Economy Last Updated: Feb 20, 2015 - 9:35 AM


HSBC Switzerland and Falciani: How it happened
By Matthew Allen, swissinfo.ch
Feb 10, 2015 - 7:22 AM

Email this article
 Printer friendly page

In 2009, Stephen Green, the then chairman of HSBC outlined his whole philosophy of ethical business in his book 'Good Value.' He was in charge of the global bank since 2066 when it was involved in money laundering for Mexican drug lords and facilitating tax evasion. 

HSBC’s Swiss-based private banking unit is facing a welter of allegations that it helped tax cheats, blood diamond dealers and terrorist organisations hide their money from the authorities. swissinfo.ch charts the road to these reputation-busting revelations.

Analysis: HSBC & Tax Evasion: France/ Belgium issued criminal charges; UK/ Ireland nothing

Besides lifting the lid on the alleged underbelly of Swiss banking, the case has reanimated the whistleblower-versus-greedy opportunist debate and led to diplomatic tensions between Switzerland and a number of other countries, including France, Spain and India.

Who is Hervé Falciani?

He is a former IT specialist at HSBC who took sensitive client data from the bank and brought it into the public domain. For many people, the jury is still out on what motivated Falciani: he claims that he is a socially responsible citizen who wanted to expose wrongdoings that were damaging society; HSBC and the Swiss authorities say he is a criminal who only ever intended to line his own pockets at the expense of the bank and its clients.

What we do know about the 43-year-old Franco-Italian is that he was raised in Monaco, where he started his career at HSBC. He was then transferred to the bank’s Geneva branch in 2006.

According to an indictment from the Swiss Federal Prosecutor’s Office, in May 2008 Falciani attempted to sell HSBC data in Lebanon, together with a female accomplice (who was reported to be involved romantically with Falciani at the time).

When that failed, he offered the data to foreign governments. The files, containing details of 130,000 HSBC Switzerland clients, eventually ended up in the hands of the French government.

Former French Finance Minister Christine Lagarde, now head of the International Monetary Fund (IMF), then decided to pass on some information to a host of other countries. Greece, India, Britain, Belgium and Argentina are among those states believed to have been handed the so-called ‘Lagarde List’.

How did Switzerland react?

Alerted by his attempted data sale in Lebanon, the Swiss police arrested Falciani in December 2008 and brought him in for questioning. But he fled Switzerland for France immediately upon being released.

Incensed by this getaway, the Swiss demanded legal assistance from the French authorities. Ironically, a police raid on Falciani’s French home led to the data getting into the hands of the French authorities. Switzerland remained empty-handed as France does not extradite its own citizens.

A later attempt by Switzerland to have Falciani extradited from Spain also proved fruitless. In December 2014, Falciani was eventually indicted in Switzerland, in absentia, on charges of industrial espionage and breaking banking secrecy laws.

What does this mean for HSBC?

The Swiss-based private banking arm of HSBC now faces a number of investigations and charges from various countries as a result of the data leak and subsequent distribution. Argentina, Belgium and France are among those countries who have accused the bank of wrongdoing.

The bank has admitted making mistakes, but insists that it has now changed its practices.

How has Switzerland been affected?

The HSBC revelations from the International Consortium of Investigative Journalists (ICIJ) represent just one in a long line of tax evasion scandals in the last few years.

UBS, Credit Suisse and the Swiss-based branch of Israel bank Leumi have all been fined by the United States. Banks Wegelin and Frey have simply collapsed under the weight of Department of Justice probes.

Several other banks are still under formal US investigation while others have entered a non-prosecution scheme on the basis that they admit their wrongdoing.

The French authorities have also placed UBS and Bank Reyl under investigation. Switzerland has promised to reform its financial centre and introduce an automatic exchange of tax information system.

The HSBC affair has had other specific repercussions for Switzerland. It led to a diplomatic fallout with France and problems with India.

What next?

The ICIJ allegations have yet to be confirmed, but they have led to a flood of embarrassing international headlines for Switzerland.

Any concrete repercussions are pending the result of investigations from different countries into HSBC Switzerland and Falciani’s court case (which could be heard in his absence). The tussle between Switzerland and India over the use of HSBC stolen data to trigger Swiss administrative assistance in tax evasion complaints has also reached stalemate.

Related Articles


© Copyright 2015 by Finfacts.ie

Top of Page

Global Economy
Latest Headlines
Strong Swiss franc gloom deepens for exporters
Global investors shift focus to China; EM outflows surge to $1tn in 13 months
Global oil glut will continue into 2016
Stable growth momentum in OECD area but slowing expected in China
Prices for major food commodities in July lowest since September 2009
Global manufacturing in July weakest level in two years
US, China and UK lead top 25 target countries for foreign direct investment
Budget surpluses rare in developed countries from 1980s; Italy, France, Greece had none in 60 and 40 years
Singapore, London and Shanghai top cities for new FDI projects in 2014; Dublin in 11th place
Exchange rates shuffle as Dublin ranked 49th most expensive city; Paris at 46; Berlin at 105
Western consumer groups under pressure in China and India
Developing countries facing “structural slowdown” likely to last for years
OECD BEPS Tax Project: Amazon books UK sales in UK; Australia proposes up to 100% in penalties
Emerging Markets Index falls to 12-month low in May as manufacturing contracts
US and world economies slowing in 2015 — OECD
Global manufacturing production rose slightly in May; Trade flows weak
GDP growth in OECD area slowed to 0.3% in the first quarter of 2015
Only one quarter of workers worldwide have stable employment contracts
Automatic Exchange of Tax Information: OECD says countries won't be able to game system
Gates Foundation loses in Swiss family's shares coup
Minimum wage levels in OECD countries
Brent oil benchmark over $68 a barrel - up almost 50% in 2015
Global growth slows and manufacturing dips to 21-month low
Family-controlled firms dominate European business
Top 10 of world’s 250 largest consumer products companies account for 30% of sales
Nine of world's 20 fastest growing economies in Africa
Globalisation maybe stalling as trade growth remains weak
Global growth prospects uneven across major economies says IMF
Emerging markets growth lowest since 2009; Global growth at 30-year average
China's economic rebalancing hitting Latin American economies
New York, London, HK & Singapore top global financial centres index; Dublin recovers
Global growth in modest expansion from low oil prices/ monetary easing says OECD
Composite leading indicators point to positive change in growth momentum in the Eurozone
Global labour market trends portend paradise for some but uncertainty for many workers
Vienna remains top of World Quality of Living Rankings in 2015; Dublin at 34
Zurich and Geneva overtake Singapore to become world's most expensive cities
HSBC Switzerland and Falciani: How it happened
Global economic power to continue shift from advanced economies
Global food price index falls in January; Cereal output set for record
Global debt has risen $57tn or 17% of world GDP since 2007