Panama Papers: HSBC, UBS, Credit Suisse, other banks helped wealthy hide assets

              More than 500 banks, their subsidiaries and branches registered nearly 15,600 shell companies with Mossack Fonseca.. HSBC alone accounts for more than 2,300 shell companies.

Written: Ryan Chittum, Cécile Schilis-Gallego & Rigoberto Carvajal

Two global companies were under mounting pressure, and threats were flying. For years, the Swiss banking giant UBS and a Panama law firm named Mossack Fonseca embraced each other in a mutually profitable relationship. UBS had customers who wanted offshore shell companies to keep their finances hidden. And Mossack Fonseca, one of the largest creators of offshore companies in the world, was happy to sell them.

READ | PM Modi steps in: Income Tax, RBI panel to probe Panama Papers trail 

But in 2010, under threat of a US criminal prosecution for tax evasion and money laundering, UBS was scrambling to contain the damage. The bank’s board of directors wanted out of the shell-company business.

Tensions boiled over in a meeting in Zurich on Sept 28 when UBS asserted that Mossack Fonseca was responsible for identifying the owners of the shell companies behind the secret accounts — not the bank.

WATCH| Explained: What Do The Panama Papers Reveal

Mossack Fonseca employee Dieter Buchholz argued that his firm had no idea who really owned some of the companies created for UBS customers, because the bank had withheld that information. UBS executive Patrick Küng objected, saying Mossack Fonseca was “in violation of the Swiss money laundering code.”

Read More

More than 500 banks, their subsidiaries and branches registered nearly 15,600 shell companies with Mossack Fonseca.

The British banking giant HSBC and its subsidiaries alone account for more than 2,300 of the companies, and UBS accounts for more than 1,100. Other big banks doing business with MF included Société Générale (979 companies), the Royal Bank of Canada (378), Commerzbank (92), and Credit Suisse (1,105).

READ | Tracking Panama cash trail: How Mossack Fonseca stonewalled Delhi 

The US investigation into banks’ role in offshore tax evasion quickly broadened beyond UBS. Credit Suisse pleaded guilty to criminal conspiracy charges in 2014 for, among other things, “assisting clients in using sham entities to hide undeclared accounts” and paid $2.8 billion to settle. Wegelin, Switzerland’s oldest bank, closed down in 2013 after paying the $58 million for aiding tax evaders.

WATCH | Panama Papers: Big Names In The Indian List

“UBS proactively decided to discontinue” setting up companies for customers in 2010 “due to changes in regulation in some of the jurisdictions where offshore companies were held and due to a further tightening of UBS’s policies,” the bank said.

READ | Panama Papers: Dawood-link shadow, Iqbal Mirchi family took offshore route 

MF said in a statement, “We conduct thorough due diligence on all new and prospective clients that often exceeds in stringency the existing rules and standards to which we and others are bound.”

Adaptive system

But while the worldwide fight against offshore tax evasion and money laundering has intensified in recent years, the system adapts ingeniously, moving money to what are at any given time the weakest points in the financial system.

READ |#PanamaPapersIndia Part 2: Politician, industrialist, jeweller 

That leaves authorities playing a game of whack-a-mole with banks and wealthy clients popping up in new locales, including the very countries leading the fight against offshore abuses.

Credit Suisse said it has toughed requirements in the past three years. It said that it “terminates the banking relationship” if clients fail to comply with requests for evidence of “tax compliance.”

UBS says it stopped setting up offshore companies for its customers in 2010. However, MF files show the bank set up 25 offshore firms for clients from 2011 to 2013.

Panama Papers: A Peek Into India Express’ 8 Month Long Investigation

Comments

  • Related News
  • America diary: Foreigners hotels.

    Narendra Modi will be staying at the iconic Waldorf Astoria hotel during his visit to New York. Waldorf Astoria in New York.While Narendra Modi will stay at the Waldorf Astoria hotel during his visit to New York, t...

    World 2015-09-24 03:32:11

    Tracking PM Modi in America: Two stars already in US Pope Francis and Xi Jinping.

    The Pope’s US tour began on Tuesday as he arrived in Washington DC. On Thursday, he will be in New York to attend the UN Sustainable Development Summit. Michelle and Barack Obama greet Pope Francis on his arr...

    World 2015-09-24 03:25:15

    Pope Francis urges US action on climate change.

    Crimes of sexual abuse should not be repeated, says Pope Francis. Pope Francis give the thumbs-up from the popemobile during a parade around the Ellipse near the White House in Washington, Wednesday. (Source: AP)Pl...

    World 2015-09-24 00:30:07

    Any act that amounts to undermining Nepals sovereignty is not acceptable: Prachanda.

    Two Senior Communist leaders from Nepal — one a former orime minister, and another one aspiring for the top post — on Tuesday said the promulgation of the new Constitution in Nepal was a “mat...

    World 2015-09-23 01:05:18

    Migrants In Berlin: Uphill task for Germany as tide rises.

    Germany- the world’s fourth largest nation by GDP or national income needs more migrants - some hundred thousands annually considering that it has an aging population. A queue of asylum-seekers in Moabit dis...

    World 2015-09-22 02:23:53

    Conflict watch: From Syria to Afghanistan, all you need to know about the week that was.

    The Turkish government continued to grapple with Kurdish militants who killed two police officers in a car bomb attack in the country’s southeast last Sunday.AFGHANISTAN: Taliban insurgents raided a jail in e...

    World 2015-09-21 00:12:16

    Turbulent Turkey.

    Kurdish nationalism, Islamic State and conflicts in Syria and Iraq — look who’s caught in the middle. Turkish soldiers stand guard as Syrians wait behind a border fence near the Turkish town of Suruc o...

    World 2015-09-21 00:03:02

    Migrants surge into Western Europe through Austria.

    Austrian police reported 6,700 new arrivals from Hungary since midnight. Europe migrant crisis: Migrants queue up for buses after they arrived at the border between Austria and Hungary near Heiligenkreuz, about 1...

    World 2015-09-19 15:30:32

    Constitution promulgation: Indian foreign secretary meets senior leaders in Nepal.

    Barely 48 hours before the scheduled delivery of the Constitution, follows what appears like Nepal’s cold-shouldering India’s suggestion to put off voting and adoption of the Constitution in hurry.India...

    World 2015-09-19 02:13:23

    Netherlands: Dutch police evacuate Paris-bound train, arrest man.

    The incident comes less than a month after passengers subdued a gunman on board a Thalys train in northern France as it was traveling from Amsterdam to Paris, also on a Friday. A anti-terrorist unit of the Dutch p...

    World 2015-09-18 17:04:31

    Taliban attack on Pakistan Air Force base kills 20; 16 die in mosque.

    The attack triggered an hours-long firefight at the base and the Pakistani forces said they killed 13 of the attackers, though it was unclear how many were involved in the assault. A volunteer and security persona...

    World 2015-09-18 13:00:59

    Vietnam accuses Thailand of attacking fishing boats.

    The Thanh Nien newspaper quoted Foreign Ministry spokesman Le Hai Binh as saying several boats were fishing illegally in Thai waters when the Thai vessel used weapons to chase them away. Fishing disputes are commo...

    World 2015-09-18 09:24:11

    Mums the Word: How Nancy Frates raised millions with one bucket.

    How Nancy Frates mobilised millions with one ice bucket challenge. It’s been four years since her son Pete was diagnosed with ALS, and Frates and her family kickstarted the Ice Bucket Challenge.“ITR...

    World 2015-09-18 00:03:02

    Military in Burkina Faso confirms coup, dissolves government.

    In the announcement aired on Thursday on national television and radio, the statement said that the transitional government had been dissolved. Burkina Faso was due to hold elections on October 11 that many hoped ...

    World 2015-09-17 14:34:13

    Nepal assembly clears Constitution, promulgation set for Sunday.

    The Communist Party of Nepal-Maoists, a splinter group of the main opposition Maoist Party, has given bandh call on September 20, the day scheduled for promulgation. The charter was passed by a 507-25 vote in the ...

    World 2015-09-17 04:03:37

    Australian fighter jets make first air strike against Islamic State in Syria.

    The United States, Canada, Turkey and Gulf states have already been involved in strikes on IS militants in Syria. The United States, Canada, Turkey and Gulf states have already been involved in strikes on IS milit...

    World 2015-09-16 08:55:59

    15 killed in Utah flash floods.

    Twelve of the victims were from two families who were in two vehicles caught off guard Monday afternoon by ragingwaters in the small town of Hildale. Russ Cook and his family stands next to severely damage vehicle...

    World 2015-09-16 08:47:45

    Displaced Syrians remain on Turkish border despite truce: MSF.

    Tens of thousands of Syrians fled the northern city of Aleppo and surrounding areas in early February as Syrian forces backed by Russian air strikes pressed an offensive there against rebels. .

    Tens of thousand...

    World 2016-03-04 22:26:00

    Turkey: 2 women hurl hand grenade, fire at police.

    The state-run Anadolu Agency said the two attackers escaped the scene in a vehicle and were hiding inside a building some distance from the police station. .

    Two female attackers on Thursday opened fire and hur...

    World 2016-03-03 17:05:29

    Donald Trump, Hillary Clinton rack up Super Tuesday wins; Ted Cruz keeps foothold.

    Both Clinton and Trump were denied a clean sweep which many poll pundits had predicted. . Super Tuesday: Both Clinton and Trump were denied a clean sweep which many poll pundits had predicted. (Source: AP)

    Repu...

    World 2016-03-02 17:50:31