HSBC is set to face fearsome US probe over Panama link
tWO crusading Us senators are urging an american crackdown on HsBC and other banks at the heart of the Panama Papers tax avoidance scandal.
senate banking committee members sherrod Brown and Elizabeth Warren have written to Us treasury secretary Jack Lew to ‘strongly urge’ action on revelations that the super-rich used Panamanian law firm Mossack Fonseca to hide money offshore. it could see the nation’s fearsome regulators step in with billion-pound fines or even criminal prosecutions for banks found to have acted wrongly.
the move is particularly bad news for HsBC, which is mentioned in a letter to the treasury secretary. if investigators find it guilty of wrongdoing, it risks losing its Us licence.
Brown and Warren have a long history with the British bank and have been some of its most fearsome critics.
they clashed with bosses after HsBC was found by the senate to have links with ‘drug kingpins and rogue nations’ in a 2012 Mexican money-laundering scandal.
authorities decided not to prosecute after that crisis, opting instead for a £1.2bn fine. if they had pressed criminal charges, it would almost certainly have led to a Us ban.
Warren railed against the decision, asking officials why ‘there was no hearing to consider shutting down HsBC’s actives in the Us’.
Last year, when the bank was in the spotlight once again over its support for wealthy tax avoiders in switzerland, Brown demanded to know if the Government had allowed it to ‘escape accountability’ for promoting evasion of Us tax laws.
HsBC has emerged as a key Mossack client in the papers, which are the biggest leak in history. they show that the bank and its affiliates used the law firm to set up 2,300 shell companies on behalf of clients.
HsBC denies any wrongdoing and says the allegations all relate to historical behaviour.
Conservative MP Jacob reesMogg, a member of the treasury select Committee, said British watchdogs must act without delay or look on powerlessly as the americans did the job for them.