Saturday 24 February 2018

The bank that let its Irish customers evade tax

Revenue nets €4.5m in unpaid taxes from 20 account holders

Herve Falciani - HSBC whistleblower
Herve Falciani - HSBC whistleblower

Mark O'Regan, Shane Phelan and Donal O'Donovan

The Revenue Commissioners has recouped €4.5m in unpaid taxes from 20 holders of Swiss bank accounts in an investigation following a leak of data on offshore account holders.

350 clients associated with Ireland held bank accounts in Switzerland, worth a total of €3.1bn. Just over half of these account holders hold an Irish passport or nationality.

The accounts are detailed in the Swiss Leaks project, based on a trove of almost 60,000 leaked files that provide data on over 100,000 HSBC clients and their bank accounts.

Ireland is ranked at number 19 among the countries with the largest amounts in the leaked Swiss files. The largest amount of money associated with a client connected to Ireland was €650m. In one case, an HSBC employee wrote a note in the file of Kerry-based businessman John Cashell: "His pre-occupation is with the risk of disclosure to the Irish authorities. I endeavoured to reassure him that there is no risk of that happening."

The lawyer for another businessman told the International Consortium of Investigative Journalists his client and his client's companies "have complied with all laws applicable to them, and are fully tax-compliant in all jurisdictions".

Revenue confirmed it received the data in June 2010. It said: "On receipt of the data, Revenue undertook an assessment and evaluation which indicated no further liability arose in the State in a number of cases and further investigation would be required in a number of other cases. Where required, Revenue initiated an investigation.

"To date there has been 20 settlements related to the data. The total amount recovered to-date from the 20 settlements was € 4.55m. A further €174,442 has been received to date as payments on account in two ongoing investigations. Revenue has initiated 33 investigations as a direct result of the data received. Three prosecutions have been secured and one other case is currently under criminal investigation," Revenue said in a statement.

French newspaper Le Monde obtained a version of the tax authority data, which covers accounts of more than 100,000 clients - individuals and legal entities - from more than 200 countries. The newspaper shared it with the ICIJ on the basis that it would assemble a global team of journalists to explore the data and produce this reporting project.

The data comes from three types of internal bank files from different time periods.

One reflects clients and their associated private accounts at the Swiss branch of the bank mostly from 1988 to 2007. Another is a snapshot of the maximum amounts in the client accounts in 2006 and 2007. The third is of notes on clients and conversations with them made by bank employees during 2005.

The files show the accounts to hold more than US$100 billion in total, from US$12.6 billion held in the name of governmental institutions from Venezuela, to amounts recorded as zero. The confidential files also provide a wealth of other detail, such as secretive offshore firms linked to some accounts.

HSBC has its headquarters in London and has offices in 74 countries. Initially it demanded the files be destroyed.

After being informed of the full extent of the findings, HSBC issued a more conciliatory response to the ICIJ: "We acknowledge that the compliance culture and standards of due diligence in HSBC's Swiss private bank, as well as the industry in general, were significantly lower than they are today."

Irish Independent

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