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HSBC scandal: Treasury Committee to investigate | HSBC scandal: Treasury Committee to investigate |
(about 3 hours later) | |
The UK's Treasury Committee is to examine allegations that HSBC's Swiss private bank helped clients evade tax. | The UK's Treasury Committee is to examine allegations that HSBC's Swiss private bank helped clients evade tax. |
Whistleblower Herve Falciani has said the UK government should have known about the scandal in 2010. | |
Committee chairman Andrew Tyrie said the committee was concerned about the allegations and had decided to take oral evidence from both HSBC and HMRC. | |
Meanwhile, the BBC understands the Treasury is preparing legislation to tighten the tax evasion laws. | |
BBC business editor Kamal Ahmed has been told that it is preparing legislation to tighten the rules on undeclared income held in offshore accounts. | |
The chancellor made it clear last April that he would like to toughen the rules over tax evasion including offshore banking. | |
Since then there has been international agreement on the automatic exchange of information regarding tax matters, but no unilateral steps from the UK government. | |
Expanded inquiry | |
Mr Tyrie said the committee would be probing whether banks had made adequate progress in changing their own practices. | |
"Banks have repeatedly told the committee that, since the crisis, they have put in place reforms to ensure that they operate on the basis of sharply improved standards," he said | |
"The committee will need reassurance that they have done so in private banking." | |
Mr Falciani, a former IT worker for HSBC, said UK tax authorities would have known about the stolen list of clients of HSBC's Swiss private bank when it was given to French officials. | Mr Falciani, a former IT worker for HSBC, said UK tax authorities would have known about the stolen list of clients of HSBC's Swiss private bank when it was given to French officials. |
The BBC has also learned the UK tax authority is to expand its inquiry. HMRC will meet the police and the Serious Fraud Office later in the week. | |
Speaking to BBC Radio 4's Today programme, Mr Falciani said French authorities had got in touch with HM Revenue & Customs and passed on information in 2010. | Speaking to BBC Radio 4's Today programme, Mr Falciani said French authorities had got in touch with HM Revenue & Customs and passed on information in 2010. |
'Huge issues' | 'Huge issues' |
He said the UK government should have known the bank itself was doing wrong in 2010. | He said the UK government should have known the bank itself was doing wrong in 2010. |
"By that time I (had) already declared and explained the problems that were happening," he said. | "By that time I (had) already declared and explained the problems that were happening," he said. |
"It was made public at that time and of course I already at that time explained the major, huge issues we were foreseeing inside HSBC," he added. | "It was made public at that time and of course I already at that time explained the major, huge issues we were foreseeing inside HSBC," he added. |
Asked if the information Mr Falciani had provided in 2010 was also about the behaviour of the bank, as well as individuals, he said: "It was exactly about the behaviour and containing all the required information for an internal audit." | Asked if the information Mr Falciani had provided in 2010 was also about the behaviour of the bank, as well as individuals, he said: "It was exactly about the behaviour and containing all the required information for an internal audit." |
He said there was much more to be shared and that co-operation between European tax authorities would reveal far more evidence. | He said there was much more to be shared and that co-operation between European tax authorities would reveal far more evidence. |
His latest revelations follow angry exchanges on Wednesday, when MPs accused tax officials of failing to deal with issues adequately. | His latest revelations follow angry exchanges on Wednesday, when MPs accused tax officials of failing to deal with issues adequately. |
Top officials from HM Revenue & Customs were shouted down by MPs, angry at what they said was a lack of urgency in tackling the HSBC tax-dodging scandal. | Top officials from HM Revenue & Customs were shouted down by MPs, angry at what they said was a lack of urgency in tackling the HSBC tax-dodging scandal. |
Margaret Hodge, chairwoman of the Public Accounts Committee, accused Lin Homer, HMRC chief executive, of a "pathetic response". | Margaret Hodge, chairwoman of the Public Accounts Committee, accused Lin Homer, HMRC chief executive, of a "pathetic response". |
Analysis: Kamal Ahmed, business editor | Analysis: Kamal Ahmed, business editor |
Herve Falciani's interview on the Today programme has raised two important issues. | Herve Falciani's interview on the Today programme has raised two important issues. |
Firstly, that he offered information in 2010 to UK authorities that HSBC was involved in aiding and abetting tax evasion for its clients. | Firstly, that he offered information in 2010 to UK authorities that HSBC was involved in aiding and abetting tax evasion for its clients. |
The government says that all it knew about were the publicly reported facts that clients of HSBC's Swiss bank were being investigated over their tax affairs. | The government says that all it knew about were the publicly reported facts that clients of HSBC's Swiss bank were being investigated over their tax affairs. |
And that meant there was no reason to prevent Lord Green, the former chairman of HSBC, becoming the new trade minister. | And that meant there was no reason to prevent Lord Green, the former chairman of HSBC, becoming the new trade minister. |
Secondly, that HSBC's Swiss bank controls in the 2000s were in a mess and that failing computer systems made it impossible for the bank to have "sufficient oversight". | Secondly, that HSBC's Swiss bank controls in the 2000s were in a mess and that failing computer systems made it impossible for the bank to have "sufficient oversight". |
This is vital, because allegations of lack of control and oversight are toxic for any bank and its board. | This is vital, because allegations of lack of control and oversight are toxic for any bank and its board. |
Don't forget, HSBC was fined nearly £1.2bn for governance failures over money laundering allegations in its Mexico operation. | Don't forget, HSBC was fined nearly £1.2bn for governance failures over money laundering allegations in its Mexico operation. |
HSBC says that controls have been improved in its Swiss operation. The question is: if Mr Falciani is correct, why were they allowed to get into such a mess in the first place? | HSBC says that controls have been improved in its Swiss operation. The question is: if Mr Falciani is correct, why were they allowed to get into such a mess in the first place? |
Ms Homer denied she had failed to take firm action against UK citizens hiding money in HSBC accounts in Geneva. | Ms Homer denied she had failed to take firm action against UK citizens hiding money in HSBC accounts in Geneva. |
She said it was "absolutely not the case" she was failing the UK taxpayer. | She said it was "absolutely not the case" she was failing the UK taxpayer. |
Ms Homer explained why there had been only one prosecution of someone whose hidden accounts in Switzerland had been revealed. | Ms Homer explained why there had been only one prosecution of someone whose hidden accounts in Switzerland had been revealed. |
She said that most of the information leaked via the French authorities in 2010, which involved about 3,600 UK individuals, was incomplete or "dirty" data. | She said that most of the information leaked via the French authorities in 2010, which involved about 3,600 UK individuals, was incomplete or "dirty" data. |
Of these, 3,200 individuals had been traced and, of the 1,100 most serious cases - which HMRC had chosen to pursue - only 130 were now outstanding. | Of these, 3,200 individuals had been traced and, of the 1,100 most serious cases - which HMRC had chosen to pursue - only 130 were now outstanding. |
From the rest of those cases, £135m had been recovered, Ms Homer said. | From the rest of those cases, £135m had been recovered, Ms Homer said. |
"We were speedy and on the case," she told the MPs. | "We were speedy and on the case," she told the MPs. |
She explained that in fact, two-thirds of the total group of UK-based HSBC account holders "were found to be compliant" with UK tax rules, in some cases because they had non-dom status. | She explained that in fact, two-thirds of the total group of UK-based HSBC account holders "were found to be compliant" with UK tax rules, in some cases because they had non-dom status. |