Swiss Bank Whistle-Blowers Said to Have Handed Over Data to U.K.
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.
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) revealed information to tax authorities 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.
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.
More than 33,000 Americans have made voluntary disclosures on money held abroad to the Internal Revenue Service in the three years through 2011. That came as UBS paid a $780 million penalty in 2009 and handed over data on about 4,700 accounts to settle a tax-evasion dispute with the U.S.
Whistle-blower Birkenfeld, a former UBS banker in Geneva, was sentenced to 40 months in prison after exposing what a U.S. prosecutor described as a “massive tax scheme” at the Swiss wealth manager.
Tax authorities have increasingly been offered secret bank information since Germany in 2009 prosecuted tax evaders, including former Deutsche Post AG Chief Executive Officer Klaus Zumwinkel, using the information bought from a former computer consultant at LGT, owned by Liechtenstein’s princely family.
Swiss secrecy laws threaten bank employees with a jail term if they divulge client information.
Switzerland agreed in March 2009 to cooperate with countries investigating tax evasion in order to avoid being blacklisted as a tax haven.
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