The leak came from an employee of HSBC Holdings in Geneva© Yann

07.02.2010 - An employee in the IT department of HSBC Hold­ings in Geneva stole data on the bank’s clients between late 2006 and early 2007.  It now turns out that it was this stolen data that enabled the French tax authorities to get their hands on the names of 3,000 suspected tax evad­ers last year.  It is thought that some €500 million has already been recouped from the unpaid tax.  French Budg­et Minister, Eric Woerth, denied paying the informant who has since been given a new identity and is living under police protection in the south of France.

When the data theft origi­nally came to light in early De­cember, HSBC insisted less than ten wealthy clients were involved.  However later it was revealed that the French tax authorities actually have 130,000 names belonging to the bank’s clients from “many other countries”.

The list is thought to have been passed to France’s chief prosecutor for possible investigation into money laundering.

France can potentially pass the list on to the tax authori­ties of the other countries whose residents appear on the list. Switzerland reacted angrily to the news and said it will suspend ratification of the double taxation agree­ment (DTA) with France, claiming that the names were illegally obtained.  France is keen to complete the proc­ess, maintaining that it had not broken any French laws. It subsequently said that it would hand back the infor­mation, though Switzerland remained concerned over what the French tax authori­ties will do with the data,

This latest whistle-blower revelation from France fol­lows on from the controver­sial incident in February of 2008 when it was exposed that another former bank employee and informant sold stolen data from LGT bank in Liechtenstein to Germany and the UK, with many other countries also benefiting from information on their citizens evading tax through holding bank accounts in the tax haven.

In the US whistleblower Bradley Birkenfeld supplied information on 19,000 sus­pected US tax evaders in 2007 which eventually led to the US forcing Swiss bank UBS to disclose names of 4,450 US account holders.  The US has an official whistle-blower programme in return for a portion of the revenue col­lected from the information given.  Other countries may well consider setting up their own schemes for tax inform­ers who can break through the barriers of bank secrecy and gain confidential informa­tion on account holders.

The global financial crisis fuelled governments with a determination to reap in unpaid tax from tax evaders to boost their exhausted treasuries.  The days are numbered for offshore bank­ing confidentiality.

There are various legiti­mate structures available to beat the taxman where people can place their money honestly and so have no fear of being ‘caught out’ by their tax authority. A specialist tax and wealth management firm such as Blevins Franks can advise you on how to reduce taxation and protect your assets for the future for you and your heirs.

To keep in touch with the latest developments in the offshore world, check out the latest news on our website www.blevinsfranks.com
By Bill Blevins,
Financial Correspondent,
Blevins Franks



This article appears in the print edition 609 of Island Connections

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