HSBC tax evasion customers in India told to get a lawyer

HSBC customers in India suspected of tax evasion have been given 30 days to nominate a legal representative in Switzerland or face seeing their names published in the country’s official gazette.

The bank has in the last two weeks forwarded a letter from the Swiss government to a select number of Indian customers, which warns that Switzerland is now prepared to give “administrative assistance” to Indian tax investigators.

This could take the form of disclosing the identities of owners of HSBC Suisse accounts, the assets they contained, and details of individual transactions. Tax evaders who refuse to co-operate will be publicly named.

India has been trying for five years to bring to book those who hid fortunes in black accounts opened with HSBC’s now notorious alpine bank.

Customers have one month to nominate a third party based in Switzerland, such as a lawyer, to manage or challenge the disclosure process on their behalf, according to a spokesman for Switzerland’s State Secretariat for International Finance.

He said: “Our law does not allow the Swiss government to send tax inquiries to citizens of other countries. That is why they need to nominate a third party in Switzerland. Customers have 30 days to provide an address in Switzerland, otherwise the Swiss government will publish their name in the official gazette. It is a normal procedure in administrative assistance.

“Only a very small number of HSBC clients are concerned. These are limited cases where the Indian authorities had additional information.”

In February, around 1,200 Indian clients were revealed to have held HSBC accounts in Geneva, with the names of leading political and business families published by the Indian Express newspaper as part of a global exposé by the International Consortium of Investigative Journalists.

The data was expected to significantly widen the scope of a Special Investigation Team appointed by India’s supreme court which in 2011 had been given a list of 628 names by the French government. France obtained the leaked data from the HSBC whistleblower Hervé Falciani in 2008 and distributed it to tax authorities around the world.

However, the Swiss have refused to disclose details of accounts based on the stolen data. Governments asking for assistance have been told to provide new proof obtained legally by their own investigators. As a result, Switzerland will disclose information on just a handful of the HSBC clients. The exact number of those caught in the administrative assistance process has not been disclosed.

HSBC confirmed the bank had written to clients following a request from the Swiss government in line with its legal obligations.

Until now, Switzerland has successfully resisted pressure to share information. Official statistics show that in 2014, the Helvetic Confederation received requests for international administrative assistance in 2,791 cases, but cooperated with just two of those requests. In 2013, there were 1,386 requests from other countries, only six of which were successful.

But international pressure is mounting. Since revelations about tax evasion at HSBC Suisse were first published by the Guardian and other media in February, other countries have come forward seeking assistance.

Argentina wants HSBC to repatriate $3.5bn sent offshore by more than 4,000 of its wealthiest citizens. The Argentine national court has written to the Swiss judiciary requesting data on the accounts. On Thursday, Greece joined the fray. Jacques de Watteville, Switzerland’s lead diplomat for international tax and banking affairs, met Greek minister of state Nikos Pappas to hammer out a deal.

Greek tax evaders would be asked to report themselves under an amnesty or face having their accounts closed, reported Alliance News in Athens. The two countries are also considering setting up an automatic exchange of data.

Powered by article was written by Juliette Garside, for on Tuesday 31st March 2015 12.12 Europe/ © Guardian News and Media Limited 2010


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