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16.11.2017 03.00 Age: 2 days

HSBC Suisse settles with France over 'Lagarde List' charges


The Geneva private banking subsidiary of HSBC has paid the French authorities EUR300 million to settle allegations that it assisted French clients evade at least EUR1.67 billion of taxable assets.

It is the first non-prosecution agreement to be made by France with a bank. The deal means that HSBC can escape all charges without admitting any wrongdoing.

The indictment of HSBC's Swiss private banking arm also named its former chief executive Peter Braunwalder and another executive, Judah Elmaleh.

The prosecution was based on client information on a CD stolen from HSBC in 2008, by one of the bank's IT contractors, Hervé Falciani, and subsequently acquired by the French government as the 'Lagarde List'. It was not only used by French prosecutors but also shared with tax authorities around the world. Falciani himself has been sentenced in absentia in Switzerland to five years in prison. He has taken refuge in France under a witness protection programme.

France's willingness to settle the case before trial may have been influenced by its inability to get co-operation from the Swiss. In April this year, Switzerland's federal Supreme Court ruled that the official French request for HSBC client account information could not be complied with, because it was based on the stolen Lagarde List.

Britain's tax authority announced in January 2016 that it had dropped a similar investigation of HSBC's Swiss office. In February 2015, the bank had published a full-page advertisement in several British newspapers apologising for the reputational damage caused by recent media coverage of its Swiss private bank, and conceding that 'the standards to which we operate today were not universally in place in our Swiss operation eight years ago'.

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HSBC Suisse settles with France over 'Lagarde List' charges