Canada: Tax Evasion: HSBC Is Still In The Spotlight

Last Updated: March 27 2015
Article by David W. Chodikoff

In early February 2015, the Washington based International Consortium of Investigative Journalists ("ICIJ") released its latest report on the depths of HSBC's involvement with clients in a wide array of illegal activities primarily aimed at hiding hundreds of millions of dollars from national tax authorities. The ICIJ had a team of journalists from 45 countries dig up information on secret bank accounts that were maintained for criminals, drug traffickers, tax dodgers, politicians and celebrities. The documents were initially obtained by the ICIJ from the national French newspaper, Le Monde. The documents demonstrate the nexus between international crime and legitimate business. The latest revelations significantly expand the public's knowledge of what tax authorities have likely known for several years regarding the scope of the HSBC's allegedly and potentially illegal and unethical behaviour.

There are a number of key findings of the journalists' latest Report and they are worth enumerating. According to this Report, HSBC Private Bank continued to offer banking services to clients who had been unfavourably named by the UN, in court documents and in the media as connected to arms trafficking, bribery and blood diamonds. HSBC also acted on behalf of discredited political figures such as former Egyptian President Hosni Mubarak, former Tunisian President Ben Ali and the current President of Syria, Bashar al-Assad. Perhaps the most galling revelation of this latest documentary analysis is the bank's repeated reassurance to its clients that it would not disclose details of accounts to national authorities, "even if the evidence suggested that the accounts were undeclared to tax authorities". Furthermore, the documents indicate that bank employees discussed with clients options to avoid the payment of tax in their home countries. (For a complete review of this report see — hsbc-sheltered-murky-cash-linked-to-dictators-and-arms.)

In pure numbers, there were 60,000 leaked files and the total value of monies held in the bank accounts exceeds an estimated $100 billion for more than 100,000 wealthy clients from around the globe (Martin Arnold, "Leaked HSBC files damage bank and lift veil on banking secrecy", Financial Times, February 9th, 2015).

Like everyone that becomes aware of this information, one's immediate reaction is to wonder what are governments "in the know" doing about this situation? The fact of the matter is that this information has been in the hands of a number of governments for sometime ... over years ... in some cases, as much as five years ... as the data, itself, goes back to the 2005 to 2007 period. This data was originally taken from HSBC by an IT engineer, Herve Falciani back in 2007 and was shared with the British and French governments in 2010. Apparently, the French government obtained a concession from the Brits that they would not share the data with other law enforcement agencies. However, we do know that the French Finance Minister at that time, Christine Lagarde (yes, that same person that now heads the IMF), prepared a list of names for other countries of people mentioned in the leaked documents supplied by Mr. Falciani. The list became known in some circles as the Lagarde List and it did lead to the arrest of tax evaders in Greece, Spain, the United States, Argentina and Belgium. However, in Great Britain, Her Majesty's Revenue and Customs authority has recovered more than 135 million pounds but only one individual has been prosecuted. And, as for HSBC ... well, Britain has yet to take legal action against the bank. You can draw your own conclusions.

What about Canada? How are we doing here with the pursuit of tax evaders, especially those with Swiss accounts that have been unearthed by whistleblowers, opportunists and simple thieves? I would suggest that we are doing poorly. To my knowledge, we have yet to see a successful prosecution involving tax evaders with, now not so hidden, accounts overseas. Yes, the Canada Revenue Agency has had success with the Voluntary Disclosure Program and yes, lots of money has been obtained through this program. Just like the current political will of the British government to catch and try tax evaders must be challenged, so too can the same questions be asked of our government. Does it have the political will? Do the agencies and departments have the necessary resources? And if the answers are yes, then where is the evidence because in the end, we, Canadians, all want the same thing. That is, everyone should pay their fair share of tax as determined by policy makers and instituted by the law.

Originally published by Taxes & Wealth Management, March 2015 | Issue 8-1.

The content of this article is intended to provide a general guide to the subject matter. Specialist advice should be sought about your specific circumstances.

To print this article, all you need is to be registered on

Click to Login as an existing user or Register so you can print this article.

David W. Chodikoff
In association with
Up-coming Events Search
Font Size:
Mondaq on Twitter
Register for Access and our Free Biweekly Alert for
This service is completely free. Access 250,000 archived articles from 100+ countries and get a personalised email twice a week covering developments (and yes, our lawyers like to think you’ve read our Disclaimer).
Email Address
Company Name
Confirm Password
Mondaq Topics -- Select your Interests
 Law Performance
 Law Practice
 Media & IT
 Real Estate
 Wealth Mgt
Asia Pacific
European Union
Latin America
Middle East
United States
Worldwide Updates
Check to state you have read and
agree to our Terms and Conditions

Terms & Conditions and Privacy Statement (the Website) is owned and managed by Mondaq Ltd and as a user you are granted a non-exclusive, revocable license to access the Website under its terms and conditions of use. Your use of the Website constitutes your agreement to the following terms and conditions of use. Mondaq Ltd may terminate your use of the Website if you are in breach of these terms and conditions or if Mondaq Ltd decides to terminate your license of use for whatever reason.

Use of

You may use the Website but are required to register as a user if you wish to read the full text of the content and articles available (the Content). You may not modify, publish, transmit, transfer or sell, reproduce, create derivative works from, distribute, perform, link, display, or in any way exploit any of the Content, in whole or in part, except as expressly permitted in these terms & conditions or with the prior written consent of Mondaq Ltd. You may not use electronic or other means to extract details or information about’s content, users or contributors in order to offer them any services or products which compete directly or indirectly with Mondaq Ltd’s services and products.


Mondaq Ltd and/or its respective suppliers make no representations about the suitability of the information contained in the documents and related graphics published on this server for any purpose. All such documents and related graphics are provided "as is" without warranty of any kind. Mondaq Ltd and/or its respective suppliers hereby disclaim all warranties and conditions with regard to this information, including all implied warranties and conditions of merchantability, fitness for a particular purpose, title and non-infringement. In no event shall Mondaq Ltd and/or its respective suppliers be liable for any special, indirect or consequential damages or any damages whatsoever resulting from loss of use, data or profits, whether in an action of contract, negligence or other tortious action, arising out of or in connection with the use or performance of information available from this server.

The documents and related graphics published on this server could include technical inaccuracies or typographical errors. Changes are periodically added to the information herein. Mondaq Ltd and/or its respective suppliers may make improvements and/or changes in the product(s) and/or the program(s) described herein at any time.


Mondaq Ltd requires you to register and provide information that personally identifies you, including what sort of information you are interested in, for three primary purposes:

  • To allow you to personalize the Mondaq websites you are visiting.
  • To enable features such as password reminder, newsletter alerts, email a colleague, and linking from Mondaq (and its affiliate sites) to your website.
  • To produce demographic feedback for our information providers who provide information free for your use.

Mondaq (and its affiliate sites) do not sell or provide your details to third parties other than information providers. The reason we provide our information providers with this information is so that they can measure the response their articles are receiving and provide you with information about their products and services.

If you do not want us to provide your name and email address you may opt out by clicking here .

If you do not wish to receive any future announcements of products and services offered by Mondaq by clicking here .

Information Collection and Use

We require site users to register with Mondaq (and its affiliate sites) to view the free information on the site. We also collect information from our users at several different points on the websites: this is so that we can customise the sites according to individual usage, provide 'session-aware' functionality, and ensure that content is acquired and developed appropriately. This gives us an overall picture of our user profiles, which in turn shows to our Editorial Contributors the type of person they are reaching by posting articles on Mondaq (and its affiliate sites) – meaning more free content for registered users.

We are only able to provide the material on the Mondaq (and its affiliate sites) site free to site visitors because we can pass on information about the pages that users are viewing and the personal information users provide to us (e.g. email addresses) to reputable contributing firms such as law firms who author those pages. We do not sell or rent information to anyone else other than the authors of those pages, who may change from time to time. Should you wish us not to disclose your details to any of these parties, please tick the box above or tick the box marked "Opt out of Registration Information Disclosure" on the Your Profile page. We and our author organisations may only contact you via email or other means if you allow us to do so. Users can opt out of contact when they register on the site, or send an email to with “no disclosure” in the subject heading

Mondaq News Alerts

In order to receive Mondaq News Alerts, users have to complete a separate registration form. This is a personalised service where users choose regions and topics of interest and we send it only to those users who have requested it. Users can stop receiving these Alerts by going to the Mondaq News Alerts page and deselecting all interest areas. In the same way users can amend their personal preferences to add or remove subject areas.


A cookie is a small text file written to a user’s hard drive that contains an identifying user number. The cookies do not contain any personal information about users. We use the cookie so users do not have to log in every time they use the service and the cookie will automatically expire if you do not visit the Mondaq website (or its affiliate sites) for 12 months. We also use the cookie to personalise a user's experience of the site (for example to show information specific to a user's region). As the Mondaq sites are fully personalised and cookies are essential to its core technology the site will function unpredictably with browsers that do not support cookies - or where cookies are disabled (in these circumstances we advise you to attempt to locate the information you require elsewhere on the web). However if you are concerned about the presence of a Mondaq cookie on your machine you can also choose to expire the cookie immediately (remove it) by selecting the 'Log Off' menu option as the last thing you do when you use the site.

Some of our business partners may use cookies on our site (for example, advertisers). However, we have no access to or control over these cookies and we are not aware of any at present that do so.

Log Files

We use IP addresses to analyse trends, administer the site, track movement, and gather broad demographic information for aggregate use. IP addresses are not linked to personally identifiable information.


This web site contains links to other sites. Please be aware that Mondaq (or its affiliate sites) are not responsible for the privacy practices of such other sites. We encourage our users to be aware when they leave our site and to read the privacy statements of these third party sites. This privacy statement applies solely to information collected by this Web site.

Surveys & Contests

From time-to-time our site requests information from users via surveys or contests. Participation in these surveys or contests is completely voluntary and the user therefore has a choice whether or not to disclose any information requested. Information requested may include contact information (such as name and delivery address), and demographic information (such as postcode, age level). Contact information will be used to notify the winners and award prizes. Survey information will be used for purposes of monitoring or improving the functionality of the site.


If a user elects to use our referral service for informing a friend about our site, we ask them for the friend’s name and email address. Mondaq stores this information and may contact the friend to invite them to register with Mondaq, but they will not be contacted more than once. The friend may contact Mondaq to request the removal of this information from our database.


This website takes every reasonable precaution to protect our users’ information. When users submit sensitive information via the website, your information is protected using firewalls and other security technology. If you have any questions about the security at our website, you can send an email to

Correcting/Updating Personal Information

If a user’s personally identifiable information changes (such as postcode), or if a user no longer desires our service, we will endeavour to provide a way to correct, update or remove that user’s personal data provided to us. This can usually be done at the “Your Profile” page or by sending an email to

Notification of Changes

If we decide to change our Terms & Conditions or Privacy Policy, we will post those changes on our site so our users are always aware of what information we collect, how we use it, and under what circumstances, if any, we disclose it. If at any point we decide to use personally identifiable information in a manner different from that stated at the time it was collected, we will notify users by way of an email. Users will have a choice as to whether or not we use their information in this different manner. We will use information in accordance with the privacy policy under which the information was collected.

How to contact Mondaq

You can contact us with comments or queries at

If for some reason you believe Mondaq Ltd. has not adhered to these principles, please notify us by e-mail at and we will use commercially reasonable efforts to determine and correct the problem promptly.