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French 'suspect Geneva bank in giant tax fraud'

Malcolm Curtis · 11 Jun 2014, 10:13

Published: 11 Jun 2014 10:13 GMT+02:00

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Paris-based daily Le Monde based this information on “legal documents” in its possession which indicate the Swiss bank is “liable to be investigated for laundering of tax fraud”.

Two examining magistrates, Renaud Van Ruymbeke and Charlotte Bilger, are investigating the issue of French taxpayers who may have evaded taxes, following the leak of client information from former HSBC employee Hervé Falciani.

Falciani, a former IT worker at the bank in Geneva, released data to the French government in 2009 on 130,000 wealthy clients at HSBC alleged to have evaded taxes.

The Swiss issued an international warrant for his arrest for alleged contravention of banking confidentiality laws.

Falciani ended up fleeing to Spain, where the courts decided against extraditing him to Switzerland because it does not have the same banking laws.

“HSBC Private Bank (Switzerland), according to the information before us, received the proceeds from acts of tax evasion and by making financial flows opaque, laundered the illicit funds, allowing thousands of customers with significant assets to escape the French tax administration,” Le Monde said, quoting one of the documents from the investigation.

The newspaper goes on to state, that according to its information, the bank allegedly put “at the disposition of its clients accounts in the name of offshore companies” and advised them on how to disguise their assets.

Le Monde said, according to information received by French investigators, certain HSBC client managers took steps in France to “sell” the creation of offshore companies and the opening of accounts to avoid European taxes.

HSBC refused to comment on Tuesday when questioned about the report by Swiss daily Le Temps.

Le Temps raised the issue of whether France is impinging on Swiss sovereignty by investigating a bank with operations in Switzerland.

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“If the French judges come to establish that there was an illegal activity on French soil, I do not see much to quarrel with,” tax lawyer Philippe Kennel told Le Temps.

“However, it seems to me that in this case they are reproaching the bank for having violated French law in Switzerland,” he said.

“And that is problematic.”

Contacted by Le Temps, a spokesman from the Swiss federal justice department is quoted as saying that since “laundering tax fraud” does not exist as a legal infraction in Switzerland with regard to direct taxes, any request for legal administrative aid would be rejected if it implies the use of “procedural constraint — for example lifting banking secrecy (laws)”.

Le Monde reported that Belgian authorities are working with the French in the case given that wealthy Belgians are suspected of also evading taxes in a similar way.  

Malcolm Curtis (news@thelocal.ch)

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