Maltese authorities will be asking their Swiss counterparts for information on $687 million held by HSBC for 71 Maltese clients in Geneva after revelations of tax evasion were made by an international group of investigative journalists.
In a report released on Sunday, the Washington-based International Consortium of Investigative Journalists said secret documents showed that prior to 2007 some 100,000 clients from around the world were using the HSBC private bank in Switzerland to dodge tax authorities in their own countries.
According to the documents, some €687.4 million belongs to Maltese clients. However, the lion’s share, $629.7m, is in the name of a single account holder.
According to details given by the Consortium, 34 per cent of Malta-linked clients held a Maltese passport. Person-linked accounts totalled 60 per cent while 30 per cent of the accounts were “numbered”. Another 10 per cent belonged to offshore companies.
The analysis showed that 82 client accounts had been opened from 1995 onwards and these were linked to 139 bank accounts. In 1995, the HSBC subsidiary Midland Bank started to operate in Malta.
It was Midland Bank that eventually bought the Maltese-owned Mid-Med Bank in 1999 and sometime later HSBC rebranded its subsidiaries under the global name HSBC. A significant spike in the number of newly opened accounts occurred in 2003.
In a statement issued yesterday evening, the Ministry of Finance said it took note of the revelations and asked the Commissioner for Revenue to request the information relative to this money.
“The Maltese revenue authorities are empowered to obtain information from the Swiss Government, or from the government of any EU member state, on the basis of the agreement related to the Savings Tax Directive,” the ministry said.
HSBC Bank Malta declined to reply directly to questions on the data involving Maltese clients but replied through its head office in the UK in a coordinated reply.
The old business model of Swiss private banking is no longer acceptable
“HSBC’s Swiss Private Bank began a radical transformation in 2008 to prevent its services from being used to evade taxes and launder money,” the bank said.
“These disclosures about historical business practices are a reminder that the old business model of Swiss private banking is no longer acceptable.”
HSBC Malta did not answer questions on whether the bank is collaborating with the Maltese authorities.
The documents revealed in the story, named ‘Swiss Leaks’, were taken by a former HSBC employee, turned whistleblower, in Switzerland in 2007 and were given to the French authorities, who in 2010 shared them with officials in other EU member states.
It is not known if the information had been passed on to the Maltese authorities and whether any form of investigation was carried out.
Some of the countries used the information to collect back taxes and impose penalties on individuals and companies connected to these private accounts.
The reports revealed that based on 2007 account information, clients of HSBC’s Swiss Private Bank included politicians, actors, rock stars and individuals with ties to arms dealers and traffickers of so-called blood diamonds – precious stones from war zones.
The revelations, which are expected to continue in the coming days, place HSBC and its officials in the spotlight because they suggest that staff at the financial multinational helped clients to cheat tax authorities.
HSBC shares on the London Stock exchange yesterday fell by 2.2 per cent. HSBC Malta shares fell marginally but were practically unaffected by the scandal.