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Why are US, France & Belgium starting prosecution against HSBC but not the UK?

tax cheatsThe evidence of wrongdoing published this week against HSBC Suisse is so overwhelming that formal investigation prior to prosecution might seem a foregone conclusion. It is indeed already happening in the US, France, Belgium, Spain, even Argentina. But not in the UK, even though HSBC is a British bank. So why the reluctance of the UK authorities to prosecute even when the charge of criminal activity is so blatant, namely that HSBC’s Swiss bank not only co-operated with wealthy clients seeking tax evasion, but proactively marketed illegal tax evasion schemes to a passive clientele? Several excuses have been put forward by the Establishment to exculpate itself from either crass incompetence or indeed brazen collusion with wrongdoing on a huge scale. But none of them stands up to scrutiny.

The line taken yesterday by the Treasury minister David Gauke, who abused parliamentary procedure by slavishly refusing to answer any of the relevant questions, was that the cache of data handed over by the French tax authorities was conditional on its not being shared with other law enforcement agencies. That seems a very convenient cover-up since the French had no conceivable motive for imposing such a restriction. Gauke claimed that it is only just now that that constraint is being lifted; but why then should the French have opened formal investigations last year against HSBC for aiding tax evasion, as they did, yet allegedly forbade the UK government from doing the same? Indeed Herve’ Falciani, who leaked the incriminating data, has said that he and the French authorities had always been willing to co-operate fully with other national tax agencies.

Another excuse is that the British government was inhibited by the multi-billion pound deal over tax evasion that Switzerland signed with the UK in 2011. At the time Osborne boasted that the UK would gain £3bn from this deal, but it has now become clear that it will secure only a fraction of that. In other words Osborne signed off a deal which hardly raised any fresh funds, but gave away to the Swiss, and in particular HSBC’s Swiss bank, virtually guaranteed immunity from prosecution. And that is now being pleaded by the Tory government as grounds for going easy on HSBC, although the fact that the banks and financial sector have now plied the Tory party with record donations of £78m for the election might also have something to do with it.

None of the excuses put forward by the government stand up. This is yet another area where, if the government refuses to set up a formal investigation in defiance of all the evidence, Parliament itself should establish a full-blown inquiry. Governments should not be allowed to have the power to block a public inquiry which would be embarrassing to their own interests.

One Comment

  1. Robert says:

    We are hearing today that the whistle blower told labour about the bank, now labour are saying the HMRC could not do anything because all the paper work was held by Government until 2010 labour are now saying this is down to the Tories .

    But since labour knew in 2007 and hid it until 2010 handing it over to the Tories, it’s a bit rich that labour can blame any one else but them. looks like Brown decided the banking crises would cover this one up so we would forget it.

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