Britain’s Revenue Office Under Attack for Letting HSBC Off the Hook

Wednesday’s raid on the Geneva offices of HSBC Private Bank (Suisse) SA, is shaking up the works in London, amidst the “row” caused by allegations that Her Majesty’s Revenue and Customs (HMRC), the equivalent of the U.S.’s Internal Revenue Service (IRS), has failed to investigate charges of HSBC’s illegal activities.

As the BBC put it, “the allegations have caused a political storm in the UK over who knew what and when.” Indeed.

The HMRC has been in possession of evidence of HSBC’s abetting of massive tax evasion schemes since 2010, yet out of 1,100 names of holders of illegal accounts, only one person has been prosecuted. When HMRC was asked to vet HSBC executive chairman Stephen Green, over his suitability to join the House of Lords as a government minister in 2010, it failed to inform Downing Street that it possessed evidence implicating HSBC in tax evasion and other potential criminal offenses, the Guardian reported Feb. 10.

A very defensive Lin Homer, head of HMRC, who along with Prime Minister David Cameron and Chancellor of the Exchequer George Osborne is getting pummeled by the Labour Party in Parliament, blames her agency’s lack of action on the French, claiming that strict treaty arrangements between the two countries prevented HMRC from using the HSBC files the French provided, to pursue criminal prosecutions for money laundering in the courts, or even from sharing intelligence with other law-enforcement agencies.

French Finance Minister Michel Sapin disputes this, the Guardian reports. In an interview with Le Monde published Feb. 13, he said, “I don’t understand the comments made by the British authorities.” The HSBC data was transmitted to HMRC in 2010 “in the framework of bilateral conventions that bind us. Nothing has been said to them since then.” While the conventions restrict the use of the information to tax purposes, he added, if the British tax office “wants to bring court cases, it is entitled to do so.”

Moreover, HSBC whistleblower Herve Falciani has revealed that both he and French authorities were always open to collaborating with other national tax agencies, but that the British never approached them for help, the Guardian reported Feb. 10.

Adding to the uproar, Peter Oborne, the Telegraph’s respected chief political commentator, has resigned from that daily over its “soft” coverage of the HSBC scandal in order to preserve its advertising account with that bank. In a scathing Feb. 17 letter explaining his action, Oborne recounts that after HSBC suspended its advertising with the Telegraph over the latter’s publication of a 2012 investigation into HSBC accounts in Jersey, reporters were ordered not to publish any stories critical of HSBC, and to destroy reports and documents related to the investigation.

Oborne concludes: “Would her Majesty’s Revenue and Customs have been much more energetic in its own recent investigations into wide-scale tax avoidance, had the Telegraph continued to hold HSBC to account after its 2012 investigation?”