A Swiss subsidiary of the HSBC banking group (HSBC Private Bank Suisse SA or ‘PBRS’) has entered into the first deferred prosecution agreement (‘DPA’) with French authorities. Provision for such agreements was made possible by France’s new anti-corruption legislation, Sapin II. Under the agreement, made between the bank and the National Financial Prosecutor of the Paris First Instance Court, HSBC will pay French authorities EURO 300 million in lieu of prosecution.
According to the French authorities, an investigation was opened in 2013 into allegations around the activities of PBRS dating back to 2006 and 2007, amongst which were included:
- Unlawful financial or banking solicitation of French prospects or of prospects residing on national territory (committed by unauthorised persons) and aiding and abetting the same offence
- Organised money-laundering of the funds received through illicit financial or banking solicitation, and
- Organised money-laundering of the proceeds of tax evasion.
The prosecutor said that ‘[F]ollowing the seizure of electronic documents on 20 January 2009, found within the French domicile of a former IT employee of PBRS, investigations revealed that numerous French tax payers had not declared to the French tax authorities the assets they owned through accounts held in the books of PBRS,’ and that, ‘[F]or several years and in any event in 2006 and 2007, PBRS had knowingly aided and abetted these French tax payers, who wished to avoid paying taxes (income tax and wealth tax), either partially or totally, including by holding in its books bank accounts of which they were the ultimate beneficial owners, and through which these French tax payers were able to invest and conceal their assets from the French tax authorities.’
For more on the provisions of Sapin II see coverage in Issue 1 of Trade Security Journal. (www.tradesecurityjournal.com)
For the terms of the DPA (in English) see: https://www.economie.gouv.fr/files/files/directions_services/afa/CJIP_English_version.pdf