British bank HSBC helped hundreds of Canadians hide Swiss accounts from authorities to avoid paying millions of dollars in taxes, CBC News has learned.
That’s one of the takeaways gleaned from a massive collection of documents collected by Hervé Falciani, a former employee of the bank, who blew the whistle on his former employer and handed over reams of data to tax authorities.
Those documents were subsequently obtained by French newspaper Le Monde and the International Consortium of Investigative Journalists (ICIJ) who shared them with CBC/Radio-Canada along with a collection of 140 journalists around the world. In total, the documents show emails and banking records for 106,000 customers of HSBC’s Swiss banking arm — altogether they have more than $100 billion US stashed away in their secret accounts.
The value of accounts tied to Canada is around $4 billion Canadian, spread across 1,859 people and companies with ties to this country. A CBC analysis of the Canadian clients' files, show the level of paranoia and secrecy that the account holders — and their banks — went to in order to keep that money out of reach of tax authorities.
The amounts in question in each account vary greatly from one bank account to another. Some appear to be either closed, or empty. But others contain amounts of hundreds of millions of dollars.
Almost half of the accounts tied to Canada are numbered accounts, where the owner isn’t named to ensure privacy. And hundreds of accounts owned by Canadians are registered in the name of companies located in tax havens such as the British Virgin Islands and Panama.
The Canada Revenue Agency says 264 Canadians involved in the HSBC leak have come forward under the agency's voluntary disclosure program, and the tax agency has recovered $28.4 million in unpaid taxes from them. But those figures don’t include numbers from Quebec, where Revenue Quebec is aware of at least 88 individuals who had undeclared assets, from whom $34.4 million in unpaid taxes has already been recovered.
But not a single one of those individuals has been charged with any tax offences, because they all came forward in the CRA’s voluntary disclosure program, which shields them from prosecution and penalties as long as they came forward willingly.
Canada isn’t alone in that strategy. In Britain, where HSBC is based, the tax agency clawed back 135 million pounds ($255 million Cdn ) from some of the 3,600 Britons identified as using the Geneva branch of HSBC, but only one has been prosecuted.
France, by contrast, has launched 103 actions against individuals ensnared in the scheme.
Citing numerous academic studies, the ICIJ report contends that worldwide, roughly $7.6 trillion US is held in overseas tax havens, depriving governments of $200 billion US a year in tax revenue. "We acknowledge and are accountable for past compliance and control failures," HSBC said in a statement accompanying the release of the report.
The bank blamed lax compliance for not fully integrating the Swiss private banking arm into the bank's regular level of diligent scrutiny following its purchase in 1999.
The bank also said it shed 70 per cent of its Swiss private bank clients, including those who were suspected of having tax compliance issues, and it was co-operating with authorities investigating tax matters. The number of accounts has fallen from 30,412 in 2007 to 10,343 at the end of last year.
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