HSBC’s Swiss arm is potentially open to a range of criminal charges in Britain because there is “credible evidence” that it has had a role in enabling tax evasion, according to a former director of public prosecutions.
In a legal opinion prepared for the consumer watchdog, SumOfUs, Lord Ken Macdonald QC argues that there is sufficient evidence for the bank to be investigated for conspiracy to defraud the UK tax authorities.
Decisions taken by Her Majesty’s Revenue and Customs (HMRC) not to prosecute the bank were “seriously legally flawed”, he said.
Macdonald also said he believed that evidence already publicly available suggested should be prosecuted under the 1977 Criminal Law Act for its part in a “systemic” operation to deprive HMRC of revenue.
“It seems clear, from the evidence we have seen, that there exists credible evidence that HSBC Swiss and/or its employees have engaged over many years in systematic and profitable collusion in serious criminal activity against the exchequers of a number of countries.
“It seems equally clear that this criminal activity has taken place within the context of an institutional cynicism that is deeply shocking.
“The corporate and wholesale nature of HSBC Swiss’ apparent involvement in what amounts to grave cross-border crime makes it all the more obvious that the relevant evidence, once it came to the attention of , should have been the subject of urgent and sustained criminal investigation.
“It is inescapable that this investigation should have included a rigorous inquiry to establish whether there was any criminal complicity on the part of HSBC Holdings plc in the UK into this category of wrongdoing on the part of its Swiss subsidiary. In our view, any sufficient evidence of such complicity would be virtually certain to warrant prosecution in the public interest.”
HSBC said it had nothing to say in response to Macdonald’s remarks. A spokesperson told the Guardian: “We are not commenting on it.”
SumOfUs is now planning to launch a judicial review of HMRC’s decision not to prosecute the bank.
Macdonald argued that HMRC could have sought mutual legal assistance from the Swiss authorities or pursued a joint investigation with other UK criminal authorities.
Martin Caldwell of SumOfUs said: “No company can be above the law. If HSBC or its employees have defrauded British taxpayers they need to be brought to justice. By allowing wealthy clients to evade tax HSBC has cheated the public out of millions of pounds that could have funded schools, hospitals and libraries across the country.
“UK tax authorities have serious questions to answer. At best HMRC suffered a serious lapse of judgement, at worst they allowed HSBC and its wealthy customers to play by different rules to the rest of us.
“Legal and public opinion is united on this. Over 60,000 SumOfUs members including thousands of HSBC shareholders and customers joined our campaign for HSBC to be brought to justice. If HMRC is unwilling to investigate HSBC it is time we made them.”
Daniel Carey of Deighton Pierce Glynn solicitors, representing SumOfUs, said: “HMRC is legally obliged to consider pursuing a criminal investigation of HSBC based on all available evidence and upon a proper understanding of the law. It appears to have failed on both counts. If it maintains this refusal then judicial review would be an important and constitutionally appropriate step to take.”
HSBC said last week that it had cooperated “continuously with the Swiss authorities since first becoming aware of the data theft in 2008 and we continue to cooperate”.
HMRC said under the terms of the transfer of the disk containing information about the accounts from the French banks in 2010, it was prevented from transferring the information to other UK authorities. But saying that Britain was “entitled to bring court cases”, subject to judicial cooperation between the two countries.
An HMRC spokesman said: “HMRC received the HSBC Suisse data under very strict international treaty conditions, which limited our use of it only to pursuing tax offences. As the data is now in the public domain, the French have confirmed that they will provide all assistance necessary to us.
“We are awaiting formal written confirmation from the French that they will alter the conditions to allow its wider use by HMRC and have already started discussions with other UK law enforcement agencies about exploiting it”.