The French authorities have placed the Swiss-based HSBC private bank under a formal tax evasion investigation just days after a Belgian judge charged the bank subsidiary with money laundering offences.
HSBC private bank said on Friday that it had been asked to pay a €50 million (CHF60 million, $63 million) bond as French investigators probe the unit's activities between 2006 and 2007.
On Monday, a Belgian investigating judge charged the Geneva-based branch with massive fiscal fraud, money laundering and forming a criminal organisation to the benefit of over 1,000 wealthy clients.
This, it was claimed, cost the Belgian authorities “hundreds of millions of euros”.
The Belgian prosecutor’s office said on Monday the accusations against HSBC Private Bankexternal link were based on its involvement over the years with “wealthy clients, specifically from the Antwerp diamond industry”. It said the justice ministry was also looking into possible money laundering.
In August, HSBC said it knew inquiries were ongoing and that the penalties “could be significant”. On Monday, it said it had been notified of the formal investigation by the Belgian judge. It said it was also being investigated by French authorities.
HSBC, Europe’s largest bank by market value, has had similar problems in recent years. Two years ago, it agreed to pay a $1.9 billion (CHF1.83 billion) fine in the US to settle a money-laundering probe. It faced accusations it transferred funds through the US from Mexican drug cartels and on behalf of nations such as Iran that are under international sanctions.
The Belgian prosecutor’s office said that in its case the private banking branch is suspected of “promoting and encouraging fiscal fraud” by putting offshore companies in Panama and the Virgin Islands at the disposal of clients. It said the companies had no other purpose than to hide its clients’ assets.
It said the events under scrutiny range from 2003 until now, adding that the total sums involved could amount to “several billions of dollars”.
The investigating judge will be calling on several leading officials and staff for questioning. The bank said it “will continue to cooperate to the fullest extent possible”.
swissinfo.ch and agencies