Report: ‘HSBC Will Turn Back On Tax Havens’

May 29, 2013

[Updated - HSBC Bermuda said they are "committed to our business in Bermuda."]

The chairman of HSBC — the parent company of HSBC Bermuda — has “pledged to cut the bank’s business with tax havens around the world,” according to a report by The Times entitled “We will turn our backs on tax havens, says HSBC.”

“Facing an onslaught of stinging questions from shareholders at its annual meeting yesterday, Douglas Flint said that Europe’s biggest bank planned to ‘significantly reduce’ its activities in low-tax regimes including Bermuda and the British Virgin Islands,” the Times report said.

Mr Flint said, “We are co-operating with tax authorities as they seek out if there is tax unpaid by individuals. We will make ourselves as bulletproof as we can in this area.”

Late last year HSBC agreed to pay a $1.92 billion settlement after an investigation by U.S. authorities found the bank violated laws by laundering money from Mexican and Colombian drug cartels and processed banned transactions for countries subject to U.S. sanctions, including Cuba, Iran and Sudan.

Speaking on that Mr Flint said, “The last two years have been extremely damaging to HSBC’s reputation. One of the most humbling experiences anyone can have is to discover that you’re not as good as you think you are. This board takes full responsibility for what happened.”

The Telegraph reports that, “Mr Flint revealed that the use of offshore tax havens was being reviewed in light of increased public scrutiny of the issue. He conceded that the use of these financial centres had got a bad name”.

“Given that it started getting a flavour to it, we need to reflect very carefully and scrutinise anything we’re involved with, anything that our customers are involved with, and decide whether that is appropriate going forward,” he said.

Mr Flint added: “I would think generally these options of being involved with tax havens will reduce.”

Update 8.36am: HSBC Bermuda CEO Richard Moseley said, “HSBC is committed to our business in Bermuda, helping our customers and the local community.

“We continue to lead the way in Bermuda and connectivity with HSBC is strong and the strategy well aligned with HSBC Group. We will continue to actively invest in local capabilities and best practices.

“Our commitment to addressing community needs is long-standing and we will continue to focus on participating in the development of the local economy through sponsorships, donations and volunteerism,” Mr Moseley concluded.

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Comments (8)

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  1. js says:

    and so it begins

    first the local real estate market tanks

    now banks are reducing their activities with off shore financial centres

    good news is that Dark & Stormys are now being sold in Canada

  2. jay says:

    What about in Delaware?

  3. Family Man says:

    Wow, I’m so glad to hear HSBC reiterate their “commitment to addressing community needs” by increasing those bank fees. If you hadn’t pointed it out, I wouldn’t have even known that increased bank fees were such a dire community need. That should really help in the “development of the local economy”. Thanks HSBC, with support like that, who needs the other banks.

    HSBC – “Helping Suckers Buy Crap” day in and day out.

  4. Huh? says:

    I’ll admit I’m no expert, far from it. But aren’t we highly regulated and in fact not a “tax haven”. Haven’t we signed a bunch of agreements with countries to be compliant with anti-money laundering legislation?

    “Tax haven” is spin used on a whim to cause damage irrespective of what the facts are.

    • gatsby says:

      Tax haven = any place with a lower tax environment than the crazy high rates currently seen in the US, et al. Although there are certain states/locales within the US that meet this definition of ‘tax haven’ as well… Delaware, as pointed out above, is just one of many…

  5. Lets Hope says:

    Funny! I guess they forgot about this. British banking giant HSBC has agreed to pay more than $1.9 billion to U.S. authorities — the largest penalty ever paid by a bank — after failing to abide by anti-money laundering and sanctions laws, it said on Tuesday.

  6. Sir George Somers says:

    HSBC – the worlds local money laundering bank!