Wednesday 11 December 2019 8:34 am

HSBC Swiss unit fined $192m over US tax evasion

HSBC’s Swiss private banking arm will pay $192.4m (£146.7m) to resolve a US investigation into its role in helping wealthy Americans evade taxes using undeclared Swiss bank accounts.

The US Department of Justice filed a charge of conspiracy to defraud the United States against HSBC Private Bank (Suisse), but agreed to drop the charges in three years if the bank abides by the terms of the deal, according to court documents. 

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The charge relates to the bank’s activities between 2000 and 2010, when the Department of Justice said it assisted US clients in hiding offshore assets and income. 

The department said HSBC Private Bank bankers would travel to US cities including Miami to scout for clients.

The HSBC deal is the latest in a string of cases involving Swiss-based banks. Lenders including UBS and Credit Suisse have paid out billions of dollars after conspiring to help rich Americans dodge taxes. 

The tough stance taken by US authorities over the last decade has helped pressure Switzerland to end the banking secrecy that had allowed offshore clients to hide money in Swiss accounts. 

The Swiss government now has deals with many counties to provide information about accounts held by foreigners in the country.

Some HSBC Private Bank bankers continued cross-border business with US clients even as authorities began investigating Swiss banks for tax-dodging schemes, the Department of Justice said.

“Some HSBC Switzerland bankers assisted clients in closing their accounts in a manner that continued to conceal their offshore assets,” said US prosecutors.

In 2009, UBS agreed to pay $780m in fines, penalties, interest and restitution for helping wealthy Americas conceal assets from US tax authorities. Credit Suisse paid $2.6bn in a similar deal in 2014.

The head of HSBC Private Bank said it had cooperated with US authorities, swapped out bankers and changed how it operates.

“Today the Swiss subsidiary operates under new management,” chief executive Alex Classen said in a statement. 

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“We have strengthened our compliance function, enhanced our control framework and put in place a comprehensive client tax transparency policy.”

HSBC paid €300m in 2017 to settle a separate tax evasion investigation by French authorities after a former employee leaked client data that triggered investigations in several countries.