The City regulator is scrutinising working practices inside HSBC in the wake of revelations that the Swiss subsidiary of Britain’s biggest bank helped its clients avoid tax.
Stopping short of launching an investigation, the Financial Conduct Authority said the leak of the bank account details “has served to reinforce the importance of firms operating with the right culture across all of their operations”.
The FCA – which has admitted it learnt about about the tax scandal through the media – is also cooperating with the Bank of England’s regulatory arm, the Prudential Regulation Authority, and HMRC.
“The FCA is working closely with the firm and other agencies which have an interest in this matter to ensure that any questions this may raise in relation to any current practices and culture of HSBC are addressed,” the FCA said.
The release of the files has sparked repercussions across the political spectrum and led to calls for a review into the handling of 3,000 suspected tax-evaders by HMRC which has resulted in just one prosecution.
But Downing Street on Monday rejected the need for an inquiry after the prime minister’s spokesman said officials had done what they could to make sure people paid up. The spokesman said it was “right that HMRC prioritised collecting revenues” before bringing cases where they could work with prosecuting authorities.
The Treasury is coming under pressure to explain why HMRC did not pursue those suspected of criminal evasion more vigorously, after Vince Cable, the business secretary, said a review would be a “good idea”.
HMRC and Treasury ministers claim France put restrictions on the use of the leaked HSBC Switzerland files, which have only just been eased.
However, this account was undermined last week by Michel Sapin, the French finance minister, who suggested the UK could have found ways to pursue criminal cases.
Asked whether the prime minister was happy with HMRC’s handling of the leak, David Cameron’s official spokesman said: “HMRC, as I see it, took the information that they had, they went through the 6,000 or so cases, they whittled that down to 3,000 specific ones to look at, went after those who were non-compliant to recoup them and launched prosecutions where they could. So they did look at and take forward action on prosecutions when they went through this HSBC data.
“HMRC went after those that were not compliant and focused on making sure that those people who had not paid the taxes that were owed did so ... The people who should have paid tax have had to pay tax. And then they did what they could with the restrictions that were imposed on them by the French on the information which has led to one prosecution so far. Clearly those restrictions have now been eased and, as HMRC said last week, they will therefore continue to have discussions with prosecuting authorities about any further action that should be taken.”
HSBC has argued that it has made changes to the way it operates following the revelations of the practices contained in the leaked bank files, which included customers being allowed to withdraw bricks of cash and take steps to avoid tax. The whole group structure was overhauled in 2011.
The bank placed advertisements in newspapers over the weekend to apologise for the conduct of its Swiss subsidiary and said the events dated back eight years.
When Martin Wheatley, the FCA boss, appeared before the Treasury select committee last week he said the bank had reformed its operations.
“The allegations are about a Swiss unit of the bank, based on events of predominantly 2005-2007,” Wheatley told MPs on the Treasury select committee. “We are very closely monitoring the ability of the bank overall … and we think significant improvements have been made.”
HSBC declined to comment on the FCA statement but said it was cooperating with regulators.
This article was written by Rowena Mason and Jill Treanor, for theguardian.com on Monday 16th February 2015 17.47 Europe/Londonguardian.co.uk © Guardian News and Media Limited 2010