The BBC has reported:
Hundreds of wealthy UK taxpayers have been sent letters by HM Revenue & Customs over possible large-scale tax evasion, the BBC has learned.
It is understood HMRC has acquired a list of high net-worth individuals with accounts at the Swiss division of HSBC.
The list was stolen by an employee and passed to the taxman by the French authorities. The bank is not accused of any wrongdoing.
The campaign comes after the government announced a crackdown on tax avoidance.
This is good news. And let’s have none of the nonsense that the list was stolen. We’ve always paid informers to tackle crime.
As for the bank’s behaviour, I note what the BBC says. But it always baffles me as to how a bank can be innocent in these cases. It has a duty to make sure it is not handling money laundered funds. Tax evaded money is money laundered in my opinion.
Also note this is HSBC. Why’s that relevant? Why, because of the Rev Stephen Green, of course! This is him:
I’m sure he delivers a great sermon. No doubt he asks his congregation to admit and repent of their sins, regularly. But a Stephen Green is also the chairman of HSBC. This is him:
Yes, they are the same guy.
And extraordinarily there’s been a chap called Stephen Green who has been chair of HSBC Private Banking Holdings (Suisse) SA. Yep, that HSBC’s Swiss private bank. This is him:
Same guy. He’s busy, isn’t he?
And then note that a chap called Stephen Green is shortly to become Lord Green and become Trade Minister in the ConDem government. Who could it be? No, surely not:
Oh yes it is.
Perhaps in his new role he’s like to tell HMRC where they should be looking.
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As the Swiss don’t consider tax evasion to be a crime, I doubt they are going to consider it money laundering.
The act of placing cash in an offshore bank account is not evasion, and therefore HSBC cannot be guilty of money laundering by accepting the cash.
For an individual to fail to disclose the account/interest in his or her tax return is most certainly evasion, but as the law stands, HSBC has no responsibility to police this.
@Greg
I agree you’re technically right – tax evasion is not a predicate offence for money laundering in Switzerland
So I said ‘in my opinion’ it should be
It is in the UK
Stephen Green should know that
@Marc Daniels
I do not agree in the UK
Tax evasion is a predicate offence – therefore a bank has a duty to ask
The bank would have to know, suspect, or have reasonable grounds for knowing or suspecting that the accountholder was engaging in tax evasion. I would think there would need to be some factor other than the mere existence of the account. But I don’t profess any great expertise in this area, and if there is authority to the contrary I am happy to stand corrected.
@Marc Daniels
Switzerland is covered by the EU Savings Tax Directive
Asking for tax to be withheld so a domestic authority does not receive data on the interest paid is sufficient flag I think to give rise to suspicion of money laundering
That is all that is needed to report
From the moment the bank fails to report a suspicion it is in the wrong
But Richard in Switzerland no offence has been coommitted as they don’t recognise tax evasion. Therefore, no offence has been coommitted as far as Swiss law is concerned, so how is it “money laundering” under Swiss law? And does Switzerland offer a choice of information exchange or withholding? My understanding is that its still automatic withholding, so there is no “opting to withhold”, and therefore no suspicious act.
The barriers to co-operation against tax evasion involving Switzerland remain massive.
@Rupert
I said in my opinion
And the EU STD does apply in Switzerland
Richard
I am well aware that the EUSTD applies in Switzerland.
What you said was “Tax evaded money is money laundered in my opinion.” But the problem is that money laundering relates to the handling of the proceeds of crime. So a “crime” has to exist in the first place, and in Switzerland tax evasion is not a “crime”, so if the opening of the Swiss bank account with legal funds (in the first place) is clearly not a crime, and if the non-reporting of the resulting interest by the accountholder is not recognised as a “crime” under Swiss law, then no crime under Swiss law has taken place. At what point therefore has the Swiss bank been involved with money laundering under Swiss law ? That can only surely be possible if the evasion of foreign tax is regarded as a crime under Swiss law, which it isn’t!
Its a ridiculous situation, which clearly has to be addressed by the international community because putting pressure (rightly) on other offshore finance centres to address tax evasion simply drives such money to places like Switzerland where these huge barriers exist. Is more tax collected as a result? No, and therein lies the problem.
[…] Oh dear, more problems for the empire run by the Rev Stephen Green. […]