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France must step up fight against tax evasion, says report France must step up fight against tax evasion, says report
(about 3 hours later)
France needs to beef up its methods for fighting tax evasion, according to a parliamentary report on a tax probe into HSBC that revealed $5bn (£4.3bn) of undeclared assets across thousands of accounts. France needs to beef up its methods for fighting tax evasion, according to a French parliamentary report on a tax investigation into HSBC that revealed $5bn (£4.3bn) of undeclared assets across thousands of accounts. The report, published on Wednesday, looked at why French authorities took more than four years to start investigating into HSBC after receiving leaked data on clients at HSBC's Swiss arm.
The report, published on Wednesday, looked at why it took French authorities more than four years to begin an investigation into HSBC after receiving leaked data on clients at HSBC's Swiss arm.
It said there had been good progress on tracking down funds but called on the French authorities to tackle "weaknesses" in the fight against tax evasion.It said there had been good progress on tracking down funds but called on the French authorities to tackle "weaknesses" in the fight against tax evasion.
"The case of the HSBC list has shed light on the weaknesses in our legal arsenal in the fight against systematic tax fraud," lawmaker Christian Eckert wrote in the report on behalf of the National Assembly's finance committee. "The case of the HSBC list has shed light on the weaknesses in our legal arsenal in the fight against systematic tax fraud," National Assembly member Christian Eckert wrote in the finance committee's report. France, like other countries, is cracking down on tax after the financial crisis that has put government budgets under strain and increased the need to maximise tax receipts.
France, like other countries, is cracking down on tax after the financial crisis that has put government budgets under strain and increased the need to maximise tax receipts.
The country began a formal investigation into HSBC in April over whether it sold products designed to avoid French tax.The country began a formal investigation into HSBC in April over whether it sold products designed to avoid French tax.
An HSBC spokesman was not immediately available for comment. An HSBC spokesman decline to comment on the report, reiterating the bank's view that Falciani had stolen the data. However he said the bank would study it.
The parliamentary report described a variety of legal, technical, diplomatic and procedural issues that began almost as soon as former HSBC employee Hervé Falciani leaked five DVDs of data to the French tax authorities in December 2008.The parliamentary report described a variety of legal, technical, diplomatic and procedural issues that began almost as soon as former HSBC employee Hervé Falciani leaked five DVDs of data to the French tax authorities in December 2008.
There were internal obstacles over the different remits of the tax authorities and the prosecutor's office, which in 2010 transferred responsibility for the case from Nice to Paris.There were internal obstacles over the different remits of the tax authorities and the prosecutor's office, which in 2010 transferred responsibility for the case from Nice to Paris.
The sheer size of the client list, which ran to 65GB over several formats, meant it took a year to extract the names behind each client account, according to the report, in a project dubbed "Operation Chocolate". The sheer size of the client list, which ran to 65GB over several formats, meant it took a year to extract the names behind each client account, according to the report, in a project dubbed Operation Chocolate.
After the client names were extracted it was found that there were $5bn in undeclared assets.After the client names were extracted it was found that there were $5bn in undeclared assets.
Diplomatic setbacks also put investigators at a disadvantage. The report said Switzerland could not be counted on to give assistance because the Swiss had made Falciani a "casus belli".Diplomatic setbacks also put investigators at a disadvantage. The report said Switzerland could not be counted on to give assistance because the Swiss had made Falciani a "casus belli".
Eckert, a leading figure on the parliamentary finance committee, said in the report there was no evidence of any tampering with evidence or pressure to scrub any names off the list. Eckert, a leading figure on the parliamentary finance committee, said in the report there was no sign of evidence tampering or pressure to scrub names off the list.
The report made no comment on the probe into HSBC. It said that since 2010, the tax authorities had begun to chase down the largest accounts and had sufficient time to track down and tax all funds where applicable without a need for urgency. The report made no comment on the investigation into HSBC. It said that since 2010, the tax authorities had begun to chase down the largest accounts and had sufficient time to track down and tax all funds where applicable without a need for urgency.
Falciani was questioned by French lawmakers, including Eckert, on 2 July to help tighten proposed rules against tax evasion.Falciani was questioned by French lawmakers, including Eckert, on 2 July to help tighten proposed rules against tax evasion.
Falciani, a Franco-Italian, was in France after taking refuge in Spain from Swiss authorities seeking his extradition.Falciani, a Franco-Italian, was in France after taking refuge in Spain from Swiss authorities seeking his extradition.