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HSBC to pay France €300million to avoid tax fraud trial

HSBC Private Bank, a Swiss unit of banking giant HSBC, has agreed to pay 300 million euros ($352 million) to avoid going to trial in France for enabling tax fraud, prosecutors said Tuesday.

HSBC to pay France €300million to avoid tax fraud trial
Photo: AFP

HSBC was accused last year of helping French clients to hide at least 1.67 billion euros from the tax authorities, according to a source close to the probe.

The deal struck between the financial crime prosecutor's office and the bank is a first in France under a new procedure that allows companies under
suspicion of corruption or dissimulation of tax fraud to negotiate a fine to stop a case from going to trial.

The deal does not include a guilty plea.

French prosecutors have now dropped the case against HSBC Holdings.

The case against HSBC was opened back in 2015 and was over an alleged global tax-dodging scheme that helped hundreds of French nationals and pothers around the world evade the tax man.

Investigators believe that HSBC's private banking division offered its customers several ways of hiding assets from the French taxman, notably via the use of offshore tax havens.

The banking giant was at first accused of failing in its supervisory role over its private banking division, but further investigation led to suspicions
that HSBC “participated actively in the fraudulent practices”, the source close to the investigation said.

The probe named the former chief executive of the bank's Swiss private banking arm, Peter Braunwalder, and another executive, Judah Elmaleh.

The case began when French authorities in late 2008 received files stolen by Herve Falciani, a former HSBC employee, whose disclosures sparked the so-called “Swissleaks” scandal on bank-supported tax evasion.

The French-Italian national — dubbed by some media as “The Edward Snowden of banking” — leaked a cache of documents allegedly indicating that HSBC helped more than 120,000 clients of a number of nationalities to hide 180.6 billion euros from tax authorities between November 2006 and March 2007.

He was sentenced in absentia in November in Switzerland to five years in prison. The leaked files led to investigations by tax authorities in several European countries including, in addition to France, Spain and Belgium.

BUSINESS

French court hands Amazon €90,000-per-day fine over contracts

French authorities on Wednesday slapped a €90,000-per-day fine on e-commerce giant Amazon until it removes abusive clauses in its contracts with businesses using its platform to sell their goods.

French court hands Amazon €90,000-per-day fine over contracts

The anti-fraud Direction générale de la concurrence, de la consommation et de la répression des fraudes (DGCCRF) service said the online sales giant’s contracts with third-party sellers who use its Amazon.fr website contain “unbalanced” clauses.

“The company Amazon Services Europe did not comply completely with an injunction it was served and it is now subject to a fine of €90,000 per day of delay” in applying the changes, the DGCCRF said in a statement.

It also urged the platform to conform with European rules on equity and transparency for firms using online platforms.

Amazon said the order would harm consumers.

“The changes imposed by the DGCCRF will stop us from effectively protecting consumers and permit bad actors to set excessive prices or spam our clients with commercial offers,” the e-commerce giant said in a statement.

“We will comply with the DGCCRF’s decision but we absolutely do not understand it and we are challenging it in court,” responded the e-commerce giant in a statement.

Amazon said the clauses that the DGCCRF has ordered removed had, for example “prevented the appearance of exorbitant prices for mask and hydroalcoholic gel during the pandemic”.

In 2019, Amazon was fined €4 million for “manifestly unbalanced” contract clauses with third-party sellers on its site in a case brought by the DGCCRF.

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