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Tax office says it was prevented from sharing HSBC tax data Tax office says it was prevented from sharing HSBC tax data
(35 minutes later)
The UK's tax office has said it was prevented by an international agreement from sharing information about HSBC's possible involvement in tax evasion.The UK's tax office has said it was prevented by an international agreement from sharing information about HSBC's possible involvement in tax evasion.
HM Revenue & Customs was passed a horde of documents in 2010 from France about possible evasion by HSBC clients.HM Revenue & Customs was passed a horde of documents in 2010 from France about possible evasion by HSBC clients.
On Tuesday, MPs criticised the City watchdog, the Financial Conduct Authority, for not knowing about the claims until reported in the media. On Tuesday, MPs criticised the City watchdog, the Financial Conduct Authority, for not knowing about the claims until media reports emerged.
One MP said the FCA could not operate effectively without knowing the facts.One MP said the FCA could not operate effectively without knowing the facts.
But an HMRC spokesman later told the BBC that under a deal with France it could not share the information.But an HMRC spokesman later told the BBC that under a deal with France it could not share the information.
"We received the data under an international treaty agreement with France which had tight restrictions. We couldn't move it outside the department," the spokesman added."We received the data under an international treaty agreement with France which had tight restrictions. We couldn't move it outside the department," the spokesman added.
The spokesperson said that the information could only be used for tax evasion purposes. The spokesperson said that the information about the activities of HSBC's Swiss operation could only be used for tax evasion purposes.
Financial Conduct Authority head Martin Wheatley had earlier told MPs he was "not aware" of the FCA being told of specific claims about HSBC's Swiss unit. FCA chief executive Martin Wheatley had earlier told the Treasury Committee that he was "not aware" of his organisation being told of specific claims about HSBC's Swiss unit.
As a result Treasury Select Committee member John Mann had questioned whether the FCA could do its job properly if it did not know all the facts. Committee member John Mann questioned how the FCA could do an effective job overseeing the banking industry if it was not informed about potential wrongdoing.
However, Mr Wheatley told MPs that the FCA was "closely monitoring the banks overall... We do have a deep programme of reform in a number of the banks regarding anti-money laundering and HSBC is one of the banks we're working closely with". 'Skeletons'
Mr Wheatley told MPs that the FCA was "closely monitoring the banks overall... We do have a deep programme of reform in a number of the banks regarding anti-money laundering and HSBC is one of the banks we're working closely with".
He also warned that the FCA had a "number of ongoing investigations which will raise further questions about the banks".He also warned that the FCA had a "number of ongoing investigations which will raise further questions about the banks".
He said banks were obliged to talk to the FCA about any "skeletons in their cupboards" early on, but the problem was that "frankly the chief executives don't know about the skeletons in their organisations".He said banks were obliged to talk to the FCA about any "skeletons in their cupboards" early on, but the problem was that "frankly the chief executives don't know about the skeletons in their organisations".
Committee chairman Andrew Tyrie said after the hearing it was clear that "much more still needs to be done" to reform banking culture.
"Mr Wheatley's comments are further evidence that some banks may be too big to manage", he said.
Tax scrutinyTax scrutiny
Authorities in a range of countries are considering examining HSBC's actions in helping more than 100,000 wealthy individuals avoid paying tax.Authorities in a range of countries are considering examining HSBC's actions in helping more than 100,000 wealthy individuals avoid paying tax.
In the UK, the Public Accounts Committee (PAC) plans to investigate the scandal and will require HSBC's former head to give evidence.In the UK, the Public Accounts Committee (PAC) plans to investigate the scandal and will require HSBC's former head to give evidence.
There have also been calls for action in the US, Belgium, France, Argentina and Switzerland itself.There have also been calls for action in the US, Belgium, France, Argentina and Switzerland itself.
HSBC said it is "co-operating with relevant authorities".HSBC said it is "co-operating with relevant authorities".
The BBC learnt that HSBC helped wealthy clients evade hundreds of millions of pounds worth of tax.The BBC learnt that HSBC helped wealthy clients evade hundreds of millions of pounds worth of tax.
Panorama has seen accounts from 106,000 clients in 203 countries, leaked by whistleblower Herve Falciani in 2007.Panorama has seen accounts from 106,000 clients in 203 countries, leaked by whistleblower Herve Falciani in 2007.
In the US a member of the Senate banking committee has asked the government to reveal what it knew about the documents.In the US a member of the Senate banking committee has asked the government to reveal what it knew about the documents.
In Belgium, a judge is considering issuing international arrest warrants for directors of the Swiss division of the bank, while France has launched an investigation and its prime minister has promised more action both at home and at a European level.In Belgium, a judge is considering issuing international arrest warrants for directors of the Swiss division of the bank, while France has launched an investigation and its prime minister has promised more action both at home and at a European level.
Swiss politicians are asking for a regulatory investigation.Swiss politicians are asking for a regulatory investigation.
The PAC's chairman, Margaret Hodge, said late on Monday: "The Public Accounts Committee will be launching an urgent inquiry to which we will require HSBC to give evidence - and we will order them if necessary".The PAC's chairman, Margaret Hodge, said late on Monday: "The Public Accounts Committee will be launching an urgent inquiry to which we will require HSBC to give evidence - and we will order them if necessary".
The PAC has a routine meeting scheduled on Wednesday at which the head of HMRC, Lin Homer, will appear.The PAC has a routine meeting scheduled on Wednesday at which the head of HMRC, Lin Homer, will appear.
'Control failures''Control failures'
HSBC admitted that it was "accountable for past control failures." But it said it has now "fundamentally changed".HSBC admitted that it was "accountable for past control failures." But it said it has now "fundamentally changed".
"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," it added."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," it added.
The bank now faces criminal investigations in the US, France, Belgium and Argentina, but not in the UK, where HSBC is based.The bank now faces criminal investigations in the US, France, Belgium and Argentina, but not in the UK, where HSBC is based.
HSBC said it is "co-operating with relevant authorities".HSBC said it is "co-operating with relevant authorities".
Offshore accounts are not illegal, but many people use them to hide cash from the tax authorities. And while tax avoidance is perfectly legal, deliberately hiding money to evade tax is notOffshore accounts are not illegal, but many people use them to hide cash from the tax authorities. And while tax avoidance is perfectly legal, deliberately hiding money to evade tax is not