Belgian authorities charge HSBC with money laundering
18 November 2014
Belgian authorities have charged HSBC with fraud and money laundering, accusing the UK bank's Swiss arm of helping wealthy customers evade tax, The Guardian reported.
This comes as the latest blow to the reputation of the industry, and comes after the lender was hit with almost £400 million infines for letting traders rig foreign exchange markets, along with five other banks.
According to the Belgian authorities, the Swiss bank was suspected of having knowingly eased and promoted fiscal fraud by making offshore companies available to certain privileged clients.
The authorities added, the damage done to the Belgian state was estimated at hundreds of millions of euros.
The bank had warned during its interim results in August that it had been informed that ''magistrates in Belgium and France are conducting inquiries regarding whether HSBC Private Bank Suisse SA acted appropriately in relation to certain customers who had Belgian and French tax reporting requirements, respectively''.
Following the announcement by Belgian prosecutors, HSBC said its Swiss private bank ''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''.
The lender added, ''Both the Belgian and French investigations have been notified in our filings previously and we will continue to cooperate to the fullest extent possible.''
HSBC, Europe's largest bank by market value, had had similar problems earlier years ago, AP reported. Two years ago it agreed to pay a $1.9 billion fine in the US to settle a money-laundering probe (See: HSBC nears $1.8-bn deal to settle money-laundering charges).
The bank was accused transferring funds through the US from Mexican drug cartels and on behalf of nations such as Iran that were under international sanctions.
According to the office of the Belgian prosecutor, in its case the private banking branch was suspected of "promoting and encouraging fiscal fraud" by putting offshore companies in Panama and the Virgin Islands at the disposal of clients. It added, the companies had no other purpose than to hide its clients' assets.
It said the events under scrutiny ranged from 2003 until now, adding the total sums involved could amount to "several billions of dollars."
The investigating judge would call on several leading officials and staff for questioning. The bank said it "will continue to cooperate to the fullest extent possible."