HSBC Swiss bank 'aided terrorists and crooks'
The Local/AFP · 8 Feb 2015, 23:40
Published: 08 Feb 2015 23:40 GMT+01:00
- Argentina blocks transfer of HSBC bank funds (13 Jan 15)
- Argentina stages massive raid of HSBC (08 Jan 15)
- HSBC Swiss unit in French tax evasion probe (21 Nov 14)
- Belgium charges HSBC Swiss branch with fraud (17 Nov 14)
Until 2006, the Swiss branch of of the British banking giant managed tens of millions of dollars for Saudi Arabian businessmen suspected since 2001 of donating money to Muslim terrorist Osama Bin Laden, according to one of the revelations.
The bank also opened accounts for a crystal meth gang in the US and a drug dealer who was sentenced to seven years in prison for the transport of 1,1212 kilograms of cocaine, the findings summed up by the “Swiss Leaks” investigation say.
The information is part of research conducted by a team of 140 journalists from 40 media outlets around the world, including Swiss newspapers Tages Anzeiger, Der Bund, SonntagsZeitung, Le Matin Dimanche and Le Temps, as well as L’Hebdo, the weekly news magazine.
Since September 2014, the International Consortium of Investigative Journalists (ICIJ) has analyzed the data leaked in 2007 by Hervé Falciani, a former IT worker at HSBC in Geneva, who fled to France.
Described as the biggest banking leak in history, the information includes details of 30,000 accounts with total assets of around $120 billion.
The French government has passed on details of clients at the bank who were evading taxes to other countries, including Argentina, Belgium, Greece, Spain, the US and the UK.
French newspaper Le Monde acquired the data and shared it with journalists from other media groups, including The Guardian in the UK, BBC Panorama and CBS.
The data shows that HSBC actively engaged in helping clients dodge taxes, in addition to dealing with individuals involved in such unsavoury activities as weapons and drugs trafficking and “blood diamonds” dealing, Tages Anzeiger reported on its website on Sunday.
The bank also opened accounts for a “long list” of leading politicians and members of ruling families from “corrupt countries”.
The research shows that HSBC allowed clients to circumvent Swiss money laundering regulations, the reports said.
"HSBC profited from doing business with arms dealers who channelled mortar bombs to child soldiers in Africa, bag men for Third World dictators, traffickers in blood diamonds and other international outlaws," ICIJ said.
Clients included former and current politicians from Britain, Russia, India and a range of African countries, according to the files.
Names in the files included people sanctioned by the United States, such as Turkish businessman Selim Alguadis and Gennady Timchenko, an associate of Russian President Vladimir Putin targeted by sanctions over Ukraine.
Former Egyptian trade minister Rachid Mohamed Rachid, who fled Cairo during the 2011 uprising against former president Hosni Mubarak, is listed as having power of attorney over an account worth $31 million, according to the files.
Other individuals named include Frantz Merceron, an associate of former Haitian president Jean Claude "Baby Doc" Duvalier, and Rami Makhlouf, cousin of Syrian President Bashar al-Assad.
HSBC has responded to the reports with an admission in a statement to the ICIJ that it is no longer operating in the way it did in 2007.
Like other private banks it “assumed that responsibility for payment of taxes rested with individual clients, rather than the institutions that banked them.”
In some case individuals took advantage of banking secrecy to hold undeclared accounts and this resulted in a “number of clients” who may not have complied with their tax obligations, HSBC said.
It noted that the Swiss private bank has cut its client base by almost 70 percent since 2007 as it weeded out those who did not meet its new standards.
The Swiss bank was acquired in 1999 and was not fully integrated into HSBC, allowing “different cultures and standards” to persist, HSBC added.
It operated in a decentralized way allowing for units to make decisions at the country level, it said.
The HSBC Private Bank, based in Geneva, was largely created through the acquisition by HSBC of the Republic National Bank of New York and Safra Republic Holdings.
The bank said a new group management in early 2011 “fundamentally changed” its structure and method of operation, while overhauling its private banking business, with new controls implemented on cash withdrawals, among other changes.