- Banks provided police with papers after court request
- Probe triggered by leak from former HSBC banker Falciani
Spanish authorities are investigating some Banco Santander SA and BNP Paribas SA employees amid allegations they may have helped shield customers’ international transfers from tax authorities, according to a person familiar with the probe.
Investigators are trying to work out who within the banks may have been responsible for the alleged transactions by analyzing evidence including papers they took from the lenders’ offices earlier this month, said the person, who asked not to be named as the investigation is ongoing.
The probe is examining whether Santander and BNP Paribas may have helped HSBC Holdings Plc clients evade taxes on funds transferred to Spain from HSBC’s Swiss unit, the person said. Once they have identified the suspects and if the evidence backs up their current suspicions, the investigators plan to recommend charges of money laundering and request jail terms for the individuals involved, and a fine for the banks, said the person. Under the current legislation, money laundering carries a sentence of as much as six years in prison.
A Santander spokeswoman declined to comment and referred to a June 3 statement in which the bank said it is cooperating with the authorities. Frederic Lemonde, a spokesman at BNP Paribas in Paris, declined to comment. Paulina Sanchez, a press officer at HSBC in Madrid, said the bank has not been contacted by the Spanish authorities in relation to any investigation.
Santander provided information about certain inter-bank transaction to the authorities following a request, the bank said in a June 3 statement. Officers from Spain’s Civil Guard visited Santander’s Madrid headquarters that day with a court order that would have empowered them to seize documentation if the bank had failed to cooperate, the person said. BNP Paribas’s Spanish unit was visited by police on June 7, the person said.
Investigators are still assessing documentation obtained from the lenders, so no final decision has been made on whether to bring a formal proceeding against the banks or their employees, said the person. The judge can also choose to disregard the investigators’ recommendation.
The probe was triggered by data leaked by former HSBC employee Herve Falciani that appeared to show that the London-based bank helped customers evade taxes and launder money, sparking investigations around the globe. Falciani co-operated with the Spanish authorities during the first phase of the investigation in 2013 by helping them to process the leaked data, according to the person.
The investigators filed a complaint against Santander and BNP Paribas once their initial inquiries, aided by Falciani, were completed in late 2013 and the probe has been overseen since then by National Court Judge Jose de la Mata in Madrid, the person said.
The authorities are now completing that second phase which focuses on a series of alleged transactions that Santander and BNP Paribas may have helped execute between 2005 and 2008. Investigators expect to hand their findings over to the court in the next few months, the person said. It will then be up to the judge to decide whether to issue indictments against any individuals involved.
Under Spanish law, companies under investigation are invited to provide data voluntarily as a first step. A formal search can be conducted if they fail to comply.
At the time of the suspected illicit activity, only individuals, rather than companies, could face criminal charges in Spain for money laundering, so Santander and BNP Paribas may face civil proceedings should the court decide that there is sufficient evidence against them. Any criminal charges would be directed at the people responsible.
The probe into the decision-making process at Santander and BNP Paribas is running alongside another National Court investigation into more than 40 HSBC clients who may have benefited from the transfers between Switzerland and Spain. Those people have been informed that they are under suspicion, the person said.