2016-04-06 08:49:57
International banking giants have denied allegations that they are helping
clients to avoid tax by using complicated offshore arrangements.
HSBC, Credit Suisse and the Royal Bank of Scotland-owned Coutts Trustees all
feature in the leaked Panama Papers.
The revelations in the papers are based on more than 11 million documents from
Panama-based law firm Mossack Fonseca.
They name lenders said to have helped to set up structures making it hard for
tax officials to pinpoint money flows.
They also name institutions alleged to have helped firms that were subject to
international sanctions.
'Comfortable'
Rami Makhlouf is the cousin of Syria's President Bashar al-Assad and has
reported wealth of $5bn.
In 2008 the US Treasury imposed sanctions on him because it deemed him to be a
"regime insider" and someone who "manipulated the Syrian judicial system and
used Syrian intelligence officials to intimidate his business rivals".
Mossack Fonseca continued to front six businesses - including one company
called Drex Technologies - for Mr Makhlouf after the restrictions were put in
place. The files also show the Swiss branch of HSBC provided financial services
for the firm.
In 2010, two years after the sanctions were imposed, HSBC wrote to Mossack
Fonseca saying it believed Drex Technologies was a company of "good standing".
An internal email from Mossack Fonseca's compliance department also suggests
HSBC staff dealing with Drex Technologies knew who Rami Makhlouf was.
The email, dated 17 February 2011, says: "We have contacted HSBC who stated
that they are very aware of the fact that Mr Makhlouf is the cousin of the
President of Syria.
"The HSBC compliance department of the bank not only in Geneva but also in
their headquarters in London know about Mr Makhlouf and confirm that they are
comfortable with him."
'Thoroughly vetted'
In response HSBC said: "We work closely with the authorities to fight financial
crime and implement sanctions.
"Our policy is clear that offshore accounts can only remain open either where
clients have been thoroughly vetted (including due diligence, 'Know Your
Customer', source of wealth, and tax transparency checks), where authorities
ask us to maintain an account for the purposes of monitoring activity, or where
an account has been frozen based on sanctions obligations."
The Panama Papers leak has revealed that more than 500 banks, including their
subsidiaries and branches, registered nearly 15,600 shell companies with
Mossack Fonseca.
Credit Suisse chief executive Tidjane Thiam said: "We do not condone structures
for tax avoidance. Whenever there is a structure with a third party beneficiary
we insist to know the identity of that beneficiary."
He added: "We as a company, as a bank only encourage the use of structures when
there is a legitimate economic purpose."
And a spokesman for Coutts Trustees said the bank followed the highest
standards when complying with regulation.
He added: "We require all clients to be tax compliant as a condition of
receiving our products and services and take a risk-based approach to identify
and prevent tax evasion that relies upon extensive anti-money laundering
systems and controls, including the requirement to understand the source of
clients' wealth.
"The provision of trust and administration services is an entirely legitimate
and key aspect of wealth management and succession planning."