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HSBC to send records to Swiss accou

HSBC to send records to Swiss account-holders, process to take 3-6 months

In a bid to wash its hands of the controversy that blew up after New Delhi stumbled upon a list of Indians with secret accounts with the Swiss arm of HSBC, the British bank has decided to send relevant documents linked to the accounts to the owners. 

While Indian authorities have been relentless in their search for details and documents that can be used to tax these individuals, HSBChas been reticent because the information was never officially shared by Switzerland but reached India after it was stolen by a former HSBC employee who, having handed over the data to the French government, sought an asylum in France. 

The investigation wing of the tax office went after these account holders, the Centre approached the bank, and HSBC came under media glare. A few months ago, the tax department even obtained the consent of some of the account-holders to surrender their rights under the Swiss secrecy law and direct HSBC to provide all records. 

More recently, HSBC decided to send copies of documents such as account-opening form, copy of passport, transaction details, instructions from account-holders and alerts received by them to the respective account-holders. This, according to a person familiar with the development, will take place over the next 3-6 months. "HSBC will not share the information with a third party. 

In other words, the papers will not directly reach the Income-Tax department. But once they are posted to the account-holders, the I-T department will be in a position to demand it from these individuals. On the back of communications between the two governments, there is a possibility that HSBC may inform the finance ministry the records have been send to account-holders," said the person. Apart from New Delhi and the tax department pursuing the matter from time to time, changing circumstances may have influenced HSBC's decision.

On one hand there is mounting pressure from US authorities to obtain information on American citizens who had escaped tax by parking money in Switzerland, on the other hand there is a greater willingness on part of Switzerland to make its banks share information. It is understood that HSBC has already sent account records of around half-a-dozen individuals who are among those that gave their consent to HSBC. Responding to ET's emailed query, an HSBC spokesman said, "We continue to engage and work with authorities and regulators in all the jurisdictions in which we operate." The account-holders in question, however, will try to wriggle out of the situation. 

Some have revoked the instructions (asking for the records) after giving consent while a few told HSBC that they had to sign the consent letter under duress. "Chances are even after HSBC sends the papers, many will not admit they have received them. But the tax office may try to obtain some confirmation from Switzerland and HSBC that the records have been sent...this may place the tax department in a stronger position," said another source. However, HSBC will not close the accounts, said the person. 

The HSBC episode has featured in the anti-corruption campaign launched by fledgling politician Arvind Kejriwal, who alleged that a number of corporate bigwigs including the Ambani brothers and the late Sandeep Tandon, a senior RIL official, had accounts in the bank. In January last year, this newspaper reported that HSBC had apologised to RIL chairman Mukesh Ambani for wrongly including his name among the account-holders. 

The information-sharing agreement between the two countries came into effect on January 1, 2012, in Switzerland and on April 1, 2012, in India. In another case, where the I-T department found a list of Indians with accounts in LGT Bank in Liechtenstein, a tax haven near Germany, prosecution proceedings are on against some persons, including beneficiaries of offshore trusts.


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