Argentina’s central bank has ordered HSBC’s local unit to name a new president and vice president for failing to prevent money laundering and tax evasion.
Ricardo Echegaray, head of Argentina’s AFIP tax agency, approves of the Central Bank’s punitive demands on HSBC.
“HSBC Argentina complies with the laws and regulations that govern its activity in the country and will continue cooperating with the Justice and regulators in Argentina”, the bank maintains.
HSBC rejected the charge, but Argentina said in March it wanted HSBC to repatriate $3.5 billion (2 billion pounds) that Argentine tax authorities said the bank had moved offshore.
The financial overseer said that because HSBC had not established the necessary controls under Martino, it would give the bank one day to replace him.
“They will have to recognise that together with Martino, and the HSBC authorities here in Argentina, they looked to cheat Argentina, to move funds overseas that they had never declared and on which they had never paid taxes”, he was quoted as saying by the Buenos Aires Herald newspaper.
HSBC allegedly helped clients hide assets overseas to avoid paying taxes through shell companies and using legal advisers and lawyers, according to a government presentation released to the media in November. “[The measure] was adopted without allowing those affected to make us of their right to defend themselves in court”, the entity claimed, adding that it was “concerned” by the measures taken by the Central Bank, run by president Alejandro Vanoli.
In February, it emerged that HSBC’s Swiss private banking arm had aided royalty, criminals, terrorists and drug dealers in dodging taxes.
A colossal cache of files leaked by Falciani to the worldwide Consortium of Investigative Journalists (ICIJ) shed light on these practices.