Published by Finews.asia – 15th Nov 2017
HSBC’s Swiss private bank said it is ending a long-running French investigation over offshore accounts by paying a fine. The agreement raises the specter of a settlement for larger rival UBS.
Geneva-based HSBC Private Bank said it will pay 300 million euros to French authorities to put aside allegations that it lured wealthy French tax dodgers with offshore accounts to conceal their funds.
The settlement is the first sign of a thaw by French prosecutors pursuing Swiss banks, including UBS, which is also involved in a years-long investigation for similar allegations.
«HSBC has publicly acknowledged historical control weaknesses at the Swiss private bank on a number of occasions and has taken firm steps to address them,» the Swiss unit of the bank said in a statement.
UBS to Save Face?
The scandal goes back to 2009, when banker-turned-whistleblower Hervé Falciani handed over reams of bank documents on alleged French tax cheats to prosecutors in France.
Eight years later, the agreement and fine is made possible by a new legal mechanism set up in France late last year, which UBS also hopes to make use of. The proceeding allows for both sides to save face: prosecutors can claim a fine, while the subject of the probe doesn’t need to plead guilty.
For HSBC, which according to court documents turned down an earlier 1.4 billion euro fine involving a guilty plea, the settlement dismisses the investigation. UBS has been close to a deal several times, but CEO Sergio Ermotti has made it clear that he doesn’t want to settle at any price.
Human Rights Bid
UBS has pulled out all the legal stops to contest the case since it was ordered to pay a 1.1 billion euro corporate bail to France three years ago. The Swiss bank even sought help – unsuccessfully – from Europe’s highest human rights court. A bid to Switzerland’s highest court on grounds of data protection also failed.
The British bank commented its agreement by admitting failings at its private bank as well as pledging and showing improvements. For Ermotti and UBS it is likely this type of admission which will prove troublesome.
