Financial Crime World

Argentina’s Tax Agency Charges HSBC with Helping Thousands Evade Taxes through Secret Swiss Accounts

Banking Giant Faces Investigation for Aiding Tax Evasion

Argentina’s tax agency, AFIP, has charged HSBC bank with helping over 4,000 Argentines evade taxes by placing their money in secret Swiss accounts. The allegations suggest that Argentine citizens evaded around $3 billion in taxes through a network of offshore accounts, some of which are allegedly owned by HSBC Argentina’s president and other bank executives.

Investigation Originates from France

The information comes from France, where HSBC was placed under formal investigation last week for possibly aiding tax evasion. The banking company has also been charged in Belgium with organized fiscal fraud. AFIP charged the local branch of HSBC and its executives in an Argentine federal court, claiming that they helped facilitate the secret accounts.

Denial from HSBC

Despite the allegations, HSBC claimed it respects Argentine laws and has committed no wrongdoing. In a statement, HSBC Argentina emphasized that:

  • “HSBC Argentina emphatically rejects its participation in any illegal association, including any organization that allows capital flight aimed at evading taxes.”
  • “HSBC Argentina wants to clarify that it doesn’t have an account in HSBC Switzerland.”

Capital Flight Concerns

This is not the first time Argentina’s government has denounced foreign companies in its fight against capital flight. Recently, it accused Procter & Gamble of tax fraud and suspended the operations of the household goods giant in this South American country.

Economic Struggles in Argentina

Argentina has been struggling to curb capital flight since defaulting on its debt during its 2001-2002 financial crisis and another default in July. The government is trying to keep dollars in the country for the Central Bank to use to pay off government debts, but the bank’s reserves have continued to plunge.

  • Currency controls make it nearly impossible to legally trade pesos for dollars.
  • Many Argentines have turned to black market money changers to obtain dollars and protect themselves from one of the world’s highest inflation rates.