Sigrún Davíðsdóttir's Icelog

What is HSBC doing in Jersey?

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The short answer, provided by Daily Telegraph, is that HSBC uses this UK secrecy jurisdiction to service those who are not at ease with banks who follow the “know your customer” rules. Whatever HSB means the C, in HSBC’s Jersey operation, seems to stand for “Criminals.”

After US authorities exposed and fined HSBC for not doing enough to prevent money laundering in its US operations one might think the UK authorities would have been keen to investigate HSBC domestic operations. But it’s no such investigation that has now exposed some highly questionable HSBC accounts in Jersey. No, according to DT the accounts have been exposed because earlier this week a whistleblower sent a list of 4000 names with addresses and account balances with the HSBC Jersey to HMRC.

The list seems to read like a veritable “Who is who” of those who might find it problematic to bank with more law-abiding banks. There is Daniel Bayes, an English drug dealer now living in Venezuela. His father was sent to prison for three years after the police found Bayes’ parents housesitting a cannabis farm, owned by Bayes. Interestingly, among HSBC Jersey clients there are also three Italian bankers –Antonia Creanza and Fulvio Molvetti, both with JP Morgan and Carlo Arosio, Deutsche Bank – standing trial in Italy together with six others for misselling complicated financial instruments to the city of Milan, costing the city millions of euros with Jersey accounts.

And what is HSBC doing about this? The bank is investigating who leaked the material to HMRC.

The use of Jersey, under UK jurisdiction, is of interest here. It’s nothing new that UK arcane offshore jurisdictions are used by big banks and big companies to do things they can’t do closer to the regulators. As long as Jersey loopholes aren’t closed banks will continue their lucrative offshore activities in Jersey and other UK secrecy jurisdiction. Is the British Government going to do anything about this? Not very likely.

The Lib Dem Business Secretary Vince Cable has often criticised bankers. If he is serious about his criticism he should take a look at the role of UK offshore jurisdictions in UK banking.

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Written by Sigrún Davídsdóttir

November 9th, 2012 at 7:31 pm

Posted in Iceland

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