In a report released on Sunday, the International Consortium of Investigative Journalists, an organization based in Washington, said that secret documents revealed that bank employees had reassured clients that HSBC would not disclose details of their accounts to tax authorities in their home countries and discussed options to avoid paying taxes on those assets. Also contributing to the report were the newspaper Le Monde in France, The Guardian in Britain, the BBC program “Panorama” and CBS News’s “60 Minutes.”
The documents were stolen from HSBC by a former employee in Switzerland in 2007 and were given to the French authorities, who in 2010 shared them with officials in Britain, Spain and the United States, among other nations. Some of those jurisdictions have used the information to seek back taxes and penalties from individuals, and the British bank has paid fines to the United States related to those disclosures.
The journalists’ report, based on account information that dated to 2007, said the Swiss unit’s clients included politicians, actors, rock stars and individuals with ties to arms dealers and traffickers of so-called blood diamonds, which are mined in war zones and sold in violation of international bans.
The revelations are the latest embarrassment for HSBC, which is facing investigations into the past activities of its Swiss unit by the authorities in Argentina, Belgium and France, and which is thought to be facing a similar inquiry in the United States.
In a long response, HSBC said that the lender’s Swiss operations “have undergone a radical transformation” in recent years and that tax reporting obligations in the past had fallen to individuals, rather than to their banking institutions.
“We have taken significant steps over the past several years to implement reforms and exit clients who did not meet strict new HSBC standards, including those where we had concerns in relation to tax compliance,” the bank said. “We have also refocused our Swiss private bank on clients from strategic markets of the group, such as owners and principals of the group’s commercial banking clients. As a result of this repositioning, HSBC’s Swiss private bank has reduced its client base by almost 70 percent since 2007.”
HSBC also said that it was fully committed to providing information to tax authorities and was “actively pursuing measures that ensure clients are tax transparent, even in advance of a regulatory or legal requirement to do so.”
Shares of HSBC fell 1.6 percent, to 610.60 pence, or about $9.30, a share in trading in London on Monday.
BBC was expected to broadcast its half-hour documentary, “The Bank of Tax Cheats,” on Monday evening in Britain.
The documents were taken by Hervé Falciani, a former information technology employee of HSBC in Switzerland. Mr. Falciani, who now lives in France, is facing criminal charges in Switzerland for breaching that country’s bank secrecy laws.
Mr. Falciani turned over the documents to the French authorities, and Le Monde then obtained them from a French investigator, according to a “60 Minutes” report that was broadcast on Sunday.
France later shared the names of potential tax evaders in 2010 with tax authorities in Britain, the United States and other countries. That list is often referred to as the Lagarde list, referring to Christine Lagarde, the head of the International Monetary Fund and France’s finance minister at the time it was circulated.
Tax authorities in Britain, France and Spain have since recovered more than 500 million pounds, or $760 million, in back taxes and penalties from individuals, according to the consortium.
But Margaret Hodge, a Labour politician and the chairwoman of the Public Accounts Committee, which oversees Britain’s tax authorities, continued her criticism on Monday of Her Majesty’s Revenue and Customs, the country’s tax collection agency, for not extracting more prosecutions and recovering more money using the HSBC data.
Questions about the British government’s response to the HSBC tax activities are expected on Wednesday when Lin Homer, the chief executive of Her Majesty’s Revenue and Customs, will appear at a previously scheduled hearing before the Public Accounts Committee.
A spokesman for the British tax collection agency said on Monday that it had used the data to collect more than £135 million in back taxes and penalties and that the government had increased the maximum penalty an individual faces for hiding money overseas to 200 percent of the tax evaded. Those agreements, which are civil in nature, remain confidential.
“We have systematically worked through all the Lagarde data,” the tax office spokesman said. “As a result, tax, interest and penalties have now been paid by those who hid their assets in Switzerland to get out of paying tax.”
“The decision to prosecute is made by the Crown Prosecution Service, based on the facts,” he said.
The spokesman also noted that British tax authorities, through information obtained from whistle-blowers and agreements with Switzerland and Liechtenstein, have recovered about £2 billion in previously unpaid taxes.
The latest revelation comes as the United States and other countries have aggressively pursued individuals who try to hide assets overseas and the financial institutions that assist them.
Since 2009, the United States has criminally prosecuted dozens of individuals who have failed to come forward regarding their undisclosed assets and has pursued criminal charges against several Swiss bankers who assisted them.
In November, HSBC agreed to settle an investigation by the Securities and Exchange Commission regarding how its Swiss private banking unit had solicited and provided advice to American clients, with the unit paying a $12.5 million fine and admitting wrongdoing.
That same month, the Belgian authorities charged HSBC’s Swiss private banking arm with assisting wealthy individuals to avoid paying taxes dating to 2003, and the unit was placed under formal investigation by French magistrates examining whether the bank had helped wealthy clients avoid French tax reporting requirements.
The authorities in Argentina have also accused the Swiss unit of assisting clients in avoiding taxes in the South American country.