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HSBC Bank accused of bilking Belgium out of hundreds of millions

11:13 18/11/2014

A Brussels investigating magistrate has accused HSBC Bank of “serious and organised” tax fraud, money laundering, criminal conspiracy and illegally acting as a financial intermediary.

The accusation falls short of actual criminal charges but is announced in order to give the suspect a chance to prepare a defence. According to the complaint, the British bank encouraged clients over a number of years to avoid paying tax on billions of euros in income, depriving the Belgian state of hundreds of millions in taxes.

According to a spokesperson for the prosecutor’s office, HSBC approached rich clients – in particular those from the Antwerp diamond sector – and offered to manage their assets, including by avoiding paying tax by using accounts in Switzerland and using offshore shell companies set up in Panama and the Virgin Islands.

According to the complaint, the shell companies were used to help more than 1,000 customers avoid the EU directive on savings income, which Switzerland has agreed to abide by since 2005. Tax on income coming through Switzerland has been 35% since 2011, but the HSBC construction helped their customers to avoid paying anything.

As well as the hundreds of millions lost to the exchequer, the bank’s activities could also include “much higher sums that may have been laundered and that the justice system could still confiscate,” the prosecutor’s spokesperson said.

The investigating magistrate will now summons executives and other employees of the bank for questioning. “Given the extraordinary gravity of the circumstances and the extent of the damages, the magistrate is counting on the greatest possible degree of co-operation,” said the spokesperson.




Written by Alan Hope