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 — www.icij.org/swiss-leaks/bankinggiant-
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
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.
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