HSBC Swiss private bank to pay US$192 million to settle US tax evasion case

HSBC Private Bank (Suisse) to enter deferred prosecution agreement with US authorities

Swiss private banking unit admitted to conspiring with US taxpayers to avoid taxes on as much as US$1.26 billion in undeclared assets

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HSBC's Swiss private banking unit admitted to conspiring with its employees, US clients and others to assist US taxpayers in evading taxes and filing false tax returns between 2000 and 2010. Photo: AFP

Published: 10:04am, 11 Dec 2019Updated: 10:57pm, 11 Dec 2019

HSBC’s Swiss private bank agreed to pay US$192.4 million in penalties and forfeiture to end a long-running inquiry in which it admitted to conspiring with US taxpayers to help them avoid paying taxes on as much as US$1.26 billion in undeclared assets, the US Department of Justice said on Wednesday.

HSBC Private Bank (Suisse) agreed to cooperate fully with the Justice Department and the Internal Revenue Service in the investigation and will enter into a deferred prosecution agreement in which it will avoid criminal charges if the Swiss unit shows “good conduct” for a period of three years.

The agreement is the latest in an inquiry that has stretched for more than a decade by US authorities and other countries into undeclared assets held by wealthy individuals and families in bank accounts in Switzerland.

The investigations have forced open the once secret world of Swiss banking after UBS agreed to pay US$780 million in 2009 and disclose names of wealthy American account holders as part of the US inquiry. It also has caused a number of Swiss institutions to stop servicing American clients.

“HSBC Switzerland conspired with US account holders to conceal assets abroad and evade taxes that every American must pay,” said Stuart M. Goldberg, acting deputy assistant attorney general in the Justice Department’s tax division.

It is also the latest settlement by HSBC Private Bank (Suisse) over undeclared assets. The Swiss private bank agreed to pay 300 million euros (US$332.7 million) in 2017 to end an inquiry by French authorities into tax evasion by French citizens and agreed in August to pay 294 million euros (US$326 million) to settle a criminal inquiry by Belgian authorities over similar conduct.