April 5, 2016
Credit Suisse and HSBC, two of the world’s largest wealth managers, dismissed on Tuesday suggestions they were actively using offshore structures to help clients cheat on their taxes.
Their comments came a day after a leak of four decades of documents from a Panamanian law firm that specializes in setting up offshore companies showed widespread use of those instruments by global banks on behalf of their clients and triggered a raft of government investigations across the world.
The so-called “Panama Papers”, revealed through an investigation by the International Consortium of Investigative Journalists (ICIJ), exposed financial arrangements of politicians and public figures including friends of Russian President Vladimir Putin, relatives of the prime ministers of Britain, Iceland and Pakistan, and the president of Ukraine. HSBC and Credit Suisse were named among the banks that helped set up complex structures that make it hard for tax collectors and investigators to track the flow of money from one place to another, according to ICIJ, which based its reports on the leaked documents from the Panamanian law firm, Mossack Fonseca.
Credit Suisse agreed in May 2014 to pay a $2.5 billion fine in the United States for helping rich Americans evade taxes. Several Swiss-based wealth managers, including cross town rival UBS Group AG, also had to pay large fines in the United States for the same reason.
HSBC, which also had wealth management operations in Switzerland, agreed in 2012 to pay $1.92 billion in U.S. fines, mainly for allowing itself to be used to launder drug money flowing out of Mexico.