Swiss Bank Whistle-Blowers Said to Have Handed Over Data to U.K. (Update 1)

By Giles Broom - May 14, 2012 11:01 PM GMT

Whistle-blowers at two Swiss banks have handed over client account data to U.K. tax authorities, according to two people with knowledge of the matter.

The authorities are examining the data before writing to U.K.-resident account holders and sharing the information with other countries, said the people, who declined to be named because the matter is confidential. At least one of the banks is foreign-owned and has clients spanning more than 100 jurisdictions, they said.

  Whistle-blowers at UBS AG, Switzerland’s biggest bank, and HSBC Holdings Plc have provided tax authorities with client data that has undermined Swiss banking secrecy and prompted Americans and Europeans to disclose hidden offshore accounts. 

 

Photographer: Valentin Flauraud/Bloomberg

Swiss private banks are under pressure following a crackdown on tax evasion in the U.S. and Europe. Whistle-blowers at UBS AG, Switzerland’s biggest bank, and HSBC Holdings Plc (HSBA) have provided tax authorities with client data that has undermined Swiss banking secrecy and prompted Americans and
Europeans to disclose hidden offshore accounts.

“We don’t comment on information we receive but we get information from a wide variety of sources which we carefully examine to make sure everyone pays the right tax,” Patrick O’Brien, a spokesman for HMRC, said yesterday. “Tackling tax evasion is a top priority and the days of hiding money offshore to evade U.K. tax have gone.”

The U.K. tax authority, known as HMRC, said in October it was acting on information on about 6,000 individuals, companies, trusts and other bodies after the French government passed on stolen client data from Herve Falciani, a former software technician at HSBC’s Geneva-based private bank.

Criminal Prosecutions

Investigations resulting from the Falciani data may lead to more than 100 criminal prosecutions, one of the people said.

At the time of the data theft, HSBC’s Swiss private bank had no more than 1,500 clients in any one country, said a Geneva-based spokesman who declined to be named in line with company policy. He declined to comment further.

The handover of data by Swiss bank whistle-blowers comes after the U.K. and Switzerland finalized an agreement in March to settle a dispute over tax evasion by wealthy Britons holding offshore accounts with Swiss private banks. Under the agreement, customers must either make a declaration to HMRC or pay a withholding tax that also covers their past failure to disclose undeclared assets.

The U.K. is targeting residents with bank accounts held outside the country as it seeks to plug a 35 billion-pound ($56 billion) tax gap and help reduce the nation’s fiscal deficit.

To contact the reporter on this story: Giles Broom in Geneva at gbroom@bloomberg.net

To contact the editor responsible for this story: Frank Connelly in Paris at fconnelly@bloomberg.net