(Bloomberg) HSBC Holdings Plc’s Swiss private banking unit was charged by Belgian prosecutors for illegally helping wealthy clients in the country dodge hundreds of millions of euros in taxes.
The Brussels prosecutors’ office said the bank was suspected of “serious and organized” fraud, money laundering, criminal organization and acting as an illegal financial intermediary, according to an e-mailed statement today.
“More than 1,000 Belgian taxpayers could be affected over amounts involving several billions of dollars that were invested, managed and/or transferred between 2003 up to the present day,” prosecutors said.
Belgium is among countries around the world seeking to rein in banks that enable rich citizens to evade taxes. Marcel Bruehwiler, the chief executive officer of UBS AG’s Belgium unit, was charged with fraud in June over a multibillion-euro tax fraud that helped customers open undeclared accounts in Switzerland.
HSBC is also embroiled in a similar probe concerning French clients of its Swiss private bank. CEO Stuart Gulliver said earlier this month that HSBC hasn’t yet been charged in that case.
Additionally, the lender is being investigated in the U.S. and said in its half-year report that it sent documents to authorities related to tax reporting requirements of American clients.
The Belgian case involves “whether the bank acted appropriately in the past in relation to certain clients who had Belgian tax reporting requirements,” HSBC Private Bank Suisse SA said in a statement. The company said it will “continue to cooperate to the fullest extent possible” with Belgian and French officials.
HSBC’s Swiss unit may have knowingly encouraged fraud by selling offshore companies in Panama and the Virgin Islands to certain clients to avoid European Union savings taxation rules, the Belgian prosecutors said. London-based HSBC is Europe’s largest bank by market value.
Several managers and employers will be summoned to hearings held by the investigating judge, the prosecutors said.
Tax avoidance leaped to the top of the EU’s agenda this month after a group of journalists published almost 28,000 documents cataloging how global companies lowered their tax bill via deals with Luxembourg.
The revelations triggered a backlash against Jean-Claude Juncker, the new European Commission president and former prime minister of Luxembourg.