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UK lawmakers to haul up HSBC, tax chiefs over Swiss bank allegations
[LONDON] British lawmakers plan to call up the bosses of HSBC and the tax authority, HMRC, to quiz them over allegations some clients of HSBC's Swiss private bank evaded tax.
HSBC Chairman Douglas Flint and HMRC Chief Executive Lin Homer are expected to appear on Feb 25 before the Treasury Committee of lawmakers, who watch over the financial industry. The Committee said on Thursday details of the hearing had not been finalised.
HSBC this week admitted failings in compliance and controls in its Swiss private bank after media reports alleged it helped wealthy customers conceal millions of dollars of assets in a period up to 2007.
The disclosures have sparked a political row over practices at HSBC, Europe's biggest bank, and whether it had done enough to pursue possible tax dodgers.
Several countries have said they are investigating the list of HSBC clients for possible tax evasion, although not all had access to the data. Israel's tax authority on Thursday said it was working to obtain the details of thousands of Israelis on the list. "The (Treasury) Committee is concerned about allegations involving HSBC and its Swiss private bank," said committee chairman Andrew Tyrie. "Banks have repeatedly told the Committee that, since the crisis, they have put in place reforms to ensure that they operate on the basis of sharply improved standards. The Committee will need reassurance that they have done so in private banking," Mr Tyrie added.
Britain's Serious Fraud Office (SFO) also said on Thursday it was open to discussing the issue with HMRC. Broadcaster the BBC said the tax authority was likely to meet both the SFO and police as it expands its investigation.
HMRC traditionally investigates tax evasion in Britain, but allegations of large-scale money laundering or the involvement in schemes by large corporations or banks could push such investigations into the territory of the SFO.
There is, however, a high hurdle to leap before prosecuting any corporation for criminal offences in England. Under current fraud laws, prosecutors need to show that top directors, the so-called controlling mind, knew about and condoned misconduct.
The International Consortium of Investigative Journalists (ICIJ), which coordinated the release of details of leaked data about HSBC clients, said the list of people who held accounts at the bank's Swiss arm included royalty, sports and rock stars, Hollywood actors, politicians and arms dealers.
Having a Swiss bank account is not illegal and many are held for legitimate purposes.
The ICIJ said details of more than 100,000 clients had been obtained, including 8,844 from Britain.
Swiss-based banks have been under fire for several years for helping clients avoid taxes and HSBC said its Swiss business had been transformed since 2008 and client accounts closed.
The issue has become a hot political topic in Britain ahead of an election in May. Prime Minister David Cameron was on Wednesday accused by the opposition Labour Party of accepting donations for his party from "dodgy" account holders.
HMRC's Homer told lawmakers that media allegations about HSBC clients did not prove wrongdoing on the part of the bank.