LAUSANNE, SWITZERLAND – China’s renminbi, which Beijing has begun cautiously promoting as an internationally accepted trading currency, may surprise us, HSBC’s global head of commodity and structured trade finance told a Financial Times conference in Lausanne Wednesday 25 April.
Jean-François Lambert said that ”It’s a huge development and moving faster than many expected, so pay attention”. He noted that the US dollar continues to be the predominant currency for commodities trades despite its recent weakness, but the banker alerted delegates to China’s shifting stance on the renminbi during as the conference focused on China’s role as a global economic powerhouse.
Richard Elman, chairman of Noble Group, believes that the rate of spending on commodities, which in turn effects economic growth, will slow in China. Personal savings in the country’s “one-child” society will be held for old-age spending, and growing commodity costs burdened by expensive investments in infrastructure will reduce spending.
Elman says that energy consumption will decrease as China’s energy use becomes more efficient.
He expects the renminbi to become an international currency in 10 to 20 years. Elman notes that China, the world’s second largest economy, has begun to internationalize the renminbi through bilateral agreements, for its use in international trade and lending.
The Singapore-based Noble Group claims to be “Asia’s largest diversified commodities trading company”.
GENEVA, SWITZERLAND – A Montreal man who was among 1,700 whose names were provided to the Canadian revenue service after bank data was stolen by a Geneva HSBC computer employee is now suing his country’s tax department. The suit brought against the Canada Revenue Agency in March comes as a Zurich court has gone after German tax authorities for accepting stolen data.
The CBC broadcasting company reports that the “application seeks an injunction to prevent the government from continuing to use “stolen data” to find out more about Canadians with Swiss bank accounts.
It also suggests that because the Canada Revenue Agency may be conducting a clandestine criminal investigation, Canadians with offshore bank accounts should not have to give the CRA information that might lead to criminal charges.”
The case dates back to data stolen by Frenchman Herve Falciani, who called himself a whistleblower and who tried to sell the information, which was at least three years old, to a number of governments. A French high court ruled early in 2012 that the data could not be used.
PARIS, FRANCE / GENEVA, SWITZERLAND – The French high court (Cours de cassation) in Paris published a ruling Tuesday 31 January that data stolen in 2007 from British bank HSBC in Geneva by its employee Hervé Falciani cannot be used by French tax authorities because it was illegally obtained. Falciani turned over the list of more than 15,000 bank accounts to the French tax office and Nice attorney general Eric de Montgolfier. France identified 3,000 of these as falling under French tax jurisdiction and shared the remaining data with Italy and Portugal.
Swiss news agency ats cites French media as saying that only 800 of the accounts have been reviewed, and the remaining account holders, if they are not yet tax compliant, have nothing to fear from the data theft. The Swiss agency cites “informed sources” as saying that French tax officials knew the information could not be used, but held the data over clients’ heads to pressure them into identifying themselves to the tax office.
Background, GenevaLunch: Falciano and HSBC data theft
Swiss left out of G20 meeting
ZURICH, SWITZERLAND – Switzerland and Germany’s foreign ministers Sunday confirmed media reports that an agreement will shortly be announced on a tax deal. The Swiss Foreign Affairs Department said in a statement that Swiss President and Foreign Minister Micheline Calmy-Rey and German Foreign Minister Guido Westerwelle “both praised the progress that has been achieved in the area of taxation, as well as the generally intensive relations between Switzerland and Germany.”
The two met Saturday 7 August in Locarno, on the sidelines of the Locarno international film festival.
Calmy-Rey “stated that she was pleased that the negotiations concerning an agreement on withholding tax will shortly be brought to a conclusion, and she went on to underscore the fact that ‘Switzerland’s banking sector has no interest in untaxed assets.’ She noted that withholding tax is a fair way of taxing German assets without an automatic exchange of information, and it also guarantees the confidential management of client data,” according to the statement.
Switzerland has not yet confirmed details of the deal, but financial media have been reporting a 26 percent withholding tax as likely, in future.
Swiss newspaper SonntagsZeitung reported at the start of the weekend that a deal is expected to be announced Wednesday 10 August, with Swiss banks agreeing to pay an upfront lump sum for Swiss accounts held by Germans who did not pay taxes in the past 10 years. The amount agreed to, possibly CHF2 billion, is reported, by what the newspaper calls a source close to the deal, to be a fraction of what Germany initially demanded.
G20 meeting in Cannes won’t include Switzerland
Switzerland’s disagreements with its neighbours over accounts held by their citizens in Swiss banks was dealt a new blow over the weekend, however, when the Seco, Switzerland’s economy ministry, confirmed to news agency ATS that French President Nicolas Sarkozy has invited Singapore, but not Switzerland, to participate in the next G20 meeting. Switzerland has been busy for several months building its influence to counteract the possibility it would not be invited to the G20 talks.
Switzerland, despite its role as the world’s top fortune management centre, is not a member of the Group of 20, the world’s largest economies, created in 1999 “to bring together systemically important industrialized and developing economies to discuss key issues in the global economy.” The high Swiss franc is currently viewed by a growing number of investors as one of a small group of “shadow currencies”, reports the Economist and other international media.
It was not invited to the last meeting of the group, in Seoul, but Sarkozy has told Switzerland it will be “integrated” into the G20 meeting, even if it is not directly participating. Switzerland fears a repeat of one of the Seoul meeting outcomes. TSR/ats reports that “the objective of this offensive is to prevent a repeat of what happened in 2009, when Switzerland, without any advance consulation, was put on a gray list of tax havens by the OECD, at the instigation of the G20.”
The next meeting will be held in Cannes in November 2011, under France’s presidency.
India studies stolen HSBC-Geneva account holders data
Meanwhile, India Express 7 August published a story saying that France has handed over to Indian authorities the names of 700 holders of HSBC bank accounts in Switzerland. France received stolen data from a former employee of the UK bank’s Geneva branch, in 2008 and the theft increased tensions between France and Switzerland over the issue of tax evasion and the use of stolen data.
The Indian Foreign Ministry says it already had most of the data from other sources, but will be checking the accounts.
GENEVA, SWITZERLAND – Europe’s largest retail bank, HSBC in the UK, announced job cuts 1 August that will reached 30,000 by the end of 2013, joining Switzerland’s UBS and Credit Suisse, as well as other large banks that have announced major staffing cuts in the past two weeks as financial markets fail to bounce back as expected from the 2008-09 global economic crisis. Credit Suisse expects to cut 2,000 jobs and UBS has not yet confirmed the number it will eliminate.
The HSBC job cuts were announced along with financial results that show a 36 percent increase in profits to $9.22 billion from $6.76 billion a year earlier. The bank is preparing to meet higher capital requirements under new Basel III world bank regulations.
Business Week reports that HSBC’s proportion of profits from Asian business rose to 76 percent, up nearly 10 percent compared to a year ago, while the share of its expenses based in Asia were just over 46 percent. Job cuts will occur in its offices worldwide, but the bank is likely to be hiring in Asia.
GENEVA, SWITZERLAND – Xinhua, China’s state-run news agency, is taking over a prime piece of advertising space in New York City’s Times Square. The space has been occupied by UK-based international bank HSBC. Reuters reports that “Xinhua is leasing a 60-foot high (18-meter) by 40-foot (12-meter) wide sign on the north end of Times Square, hoping to reach the estimated half a million people that pass through the area every day.”
Xinhua in early July 2010 launched an international English language TV service. It has for several years provided the widest coverage of Chinese news in English.
Links to other sites: New York Times, Wall St Journal
New rules from Basel for banks worldwide
BASEL, SWITZERLAND – The word Basel means one thing to bankers this week: new capital requirements.
New regulations will mean that the world’s largest banks have to raise additional capital and Tuesday’s paper is designed in part to give investors guidelines for “calculating extra funds that the lenders must raise”, reports Bloomberg, which notes that “the Financial Stability Board also published separate plans to ensure the orderly winding down of failed banks and shield taxpayers from bailing them out”.
The Financial Stability Board and the Basel Committee on Banking, both of which are part of the Bank for International Settlements (BIS) unveiled details 19 July of the additional capital requirements that could apply to 28 banks “globally systematically important banks” that have been identified, in a document put out for consultation until early August.
The new formula for determining which banks are at what level of risk was promptly questioned by some of the world’s leading banks, which argue that the tougher capital requirements would endanger economic recovery by restricting their lending. Switzerland plans to implement even tougher standards and Sweden says it wants to do the same.
Bankers, however, say even the Basel III stringent requirements will push up the cost of lending.
Numbers don’t correspond to files handed back to Geneva bank
Nice, France (GenevaLunch) – The public prosecutor in Nice, Eric de Montgolfier, told a group of reporters Wednesday 14 April that 80,000 account holders have been identified, 8,000 of them French, from the files stolen from HSBC bank’s Geneva offices in 2007. The former HSBC employee who stole them, Herve Falciani, has been given a new identity by the French and he appears to have helped the government decrypt the files.
The figures don’t, however, correspond to those the bank says it found when Swiss authorities gave it a copy of most of the data in March.
HSBC in Geneva said 11 March 2010 that while the number of accounts was greater than the original 10 mentioned in 2009 by the bank, the total number was 24,000, well below the figure provided this week by the French prosecutor. Of those, 9,000 had left the bank, since the stolen data covered accounts that dated back to 2006.
Herve Falciano recounted a saga of life in a thriller to Nice Matin newspaper but there is little evidence to back the story
Geneva, Switzerland (GenevaLunch) - Europe’s largest bank made a startling confession, accompanied by an apology, to its clients 11 March: Britain’s HSBC said it had been given evidence by the Swiss Federal Prosecutor that a Geneva office employee stole data linked to 24,000 client accounts and tried to sell the information abroad. The employee, Hervé Falciani, had tried to flog that data to Lebanon in 2008. His failed attempt was the start of the unraveling of his theft scheme. Evidence of efforts by Falciani and a female companion for the first time linked his name to the theft, which the Swiss government had been investigating for several weeks.
Human factor is the real risk for an international company with secrets
It also drew attention to a significant problem for international companies that have any private data, from client information to research and development data: It takes a human being to steal for personal gain, so knowing staff well is as critical to security as a good IT system. Laws inside a country may protect corporate secrets and privacy, but once international boundaries are crossed the issue of countries not extraditing their own citizens can become an issue.
Thief, spy saga victim or honest whistleblower: Falciani’s many faces
Falciani’s theft covered several months but it is not yet clear how he did it
[correction 13 March] Geneva, Switzerland (GenevaLunch) - The extraordinary under-assessment by HSBC of the number of bank accounts implicated in the theft of data from Geneva begins to make more sense when the timeline the bank provided to the press Thursday 11 March is studied. French authorities and then Swiss have been privy to the data for months, but the bank says its first credible clue about the scope of the theft came only one week ago, 3 March.
Hervé Falciani stole data linked to accounts of some 24,000 clients in Geneva, some 15,000 of whom are still clients, but the bank initially said only 10 accounts were involved. How he did it is still unclear and is under investigation by the Swiss Federal Prosecutor’s office. Falciani is in hiding in France: France, like many countries including Switzerland, does not extradite its own citizens, which puts him out of the reach of Swiss investigators.
Timeline provided by HSBC
Background, GenevaLunch
Geneva, Switzerland (GenevaLunch) – HSBC, Europe’s largest bank, cleared up some of the confusion that has surrounded the 2008 theft of client data from its Geneva bank and apologized to its current customers at a press conference in Geneva Thursday morning 11 March. A total of 15,000 current clients, slightly less than one-fifth of its customer base of 100,000 clients in Switzerland, were affected when French employee Hervé Falciani, an IT employee, stole data over a period of several months during 2006-08, the bank acknowledged. It noted that the extent of the theft was shown to it only 3 March, a week ago, when the Swiss Federal Prosecutor gave it copies of “a substantal portion” of the stolen data. HSBC says it is now “actively contacting” clients to apologize.
Data was also stolen on additional 9,000 clients’ who have left the bank, bringing to 24,000 the total number touched by the theft. Many of those who left did not have large enough amounts to warrant a wealth management account.
Alexandria, Virginia, USA (GenevaLunch) - A doctor based in Virginia in the US pleaded guilty Tuesday 16 February to conspiracy to evade taxes. This is reportedly the first IRS (US tax authority) case where a non-US bank other than Switzerland’s UBS is cited as providing advice about how to evade taxes.
German local government confirms new stolen data offered, Swiss president confirms Germany bought first batch
Swiss politician might consider reconsidering Swiss banking secrecy, some hint
Bern, Switzerland (GenevaLunch) – The saga of data stolen from Swiss banks and offered to the German government continues, with new wrinkles to the story. A German newspaper will publish an article Saturday, reports Swiss television TSR, stating that a new batch of stolen data, with 2,000 client names, is being offered to a regional German government. The government of Bade-Wurtemberg has confirmed the information.
Meanwhile, Swiss President Doris Leuthard told reporters as she came out of a meeting that Switzerland will likely ask for a copy of the first batch of stolen data. Switzerland did the same with data stolen from a Geneva branch of British bank HSBC and sold to the French government. The data will allow Switzerland to see if requests for judicial assistance from France, and perhaps now from Germany, are based on information obtained from the stolen files. If this is the case, Switzerland will refuse to provide assistance because of the illegal source of the information.
Switzerland and Germany have confirmed this week that they are slowly, steadily continuing to negotiate a new bilateral double taxation agreement.
One of the results of this, according to Le Temps newspaper, is that the question of the viability of Swiss banking secrecy is no longer a taboo political issue.
Thieves to be prosecuted once identity known
Doris Leuthard, Swiss president, meets Nicolas Sarkozy, French president at the World Economic Forum (photo ©2010 WEF and swissimage.ch)
Davos, Switzerland (GenevaLunch) – Swiss Finance Minister Hans-Rudolf Merz told reporters in Davos late Wednesday 27 January that a French-Swiss crisis over stolen bank data is now over, and the bilateral double taxation agreement that was put on hold by Switzerland in December is nearly back on track.
Rumours have been swirling in the past few days, suggesting that France and Switzerland had found a way out of a diplomatic struggle over stolen bank data, which French officials appeared to confirm.
Merz’s comments came at the end of a meeting with his French counterpart, Eric Worth, on the fringes of the World Economic Forum. The two met alone after a brief meeting with the presidents of their countries, Doris Leuthard and Nicolas Sarkozy.
The agreement covers three issues:
Zurich, home to banking thrillers
Zurich, Switzerland (GenevaLunch) – Call them whistleblowers if you believe their consciences have overcome them, or thieves if you think they’ve broken the law. Whatever the label, people who take client data from Swiss banks that employ them, then offer the information to another government, are suddenly back in the headlines.
French officials told Swiss news agency ATS Thursday evening 21 January that France has handed back to Switzerland data stolen by a French citizen. It made the announcement a day after the Swiss Finance Department said it would not provide administrative assistance to countries in cases where stolen information was used. France told ATS it has kept copies of some of the information, for its own investigations.
The data was stolen from British bank HSBC in Geneva, by Frenchman Hervé Falciani. The case came into the public spotlight late in 2009.
Switzerland is reviewing its legislation with an eye to setting clearer limits for handing over data to a treaty partner when it demands assistance in suspected tax fraud cases.
US newspaper says whistleblowers “chipping away” at bank secrecy
Falciani was not the first bank employee to pocket data. American Bradley Birkenfeld stole UBS client data in 2008 and gave it to the US tax authority, the IRS in a case that has had a major impact on the bank’s reputation and which badly strained US-Swiss relations.
To believe the New York Times 19 January, Swiss Rudolf M Elmer has just become the first whistleblower of 2010, a man who “is chipping away at the centuries-old traditions of Swiss banking secrecy,” in line with Falciani and Birkenfeld.
Bern, Switzerland (GenevaLunch) -The latest twist in the increasingly tangled tale of client data stolen from HSBC in Geneva comes from the thief himself, formerly known as Hervé Falciani. The former HSBC computer system employee who now lives under a new identity in the south of France told French journalists from Nice Matin that in August 2008 he was kidnapped by two men in a van in Geneva’s Champel district. The men were of unclear Middle Eastern origin, perhaps Israeli, says Falciani, who accuses his Lebanese girlfriend at the time of being part of a plot to discredit him.
The Lebanese link has surfaced following accusations by Switzerland that Falciani was trying to sell the names and other information about bank clients, which he acknowledges he stole, to several governments, notably Lebanon.
HSBC victim of data theft
Update 21:15 (last paragraph) Bern, Switzerland (GenevaLunch) – The French authorities have responded favourably to Switzerland’s demand to return the data stolen by a former employee of HSBC Private Bank in Geneva, reportedly amounting to 130,000 client names. French Ministry of Justice officials confirmed that the stolen laptop was to be returned “very quickly”.
The encrypted client data, taken from the bank by former IT employee Hervé Falciani, was turned over to the French public prosecutor’s office in Nice, where investigations were opened into French clients of the bank suspected of money-laundering. Switzerland had asked the French authorities for judicial assistance earlier this year when Falciani was found to have stolen the data and moved to France. As part of the cross-border cooperation, Swiss authorities supplied the French with the means to decipher the data on the laptop.
Hans-Rudolf Merz
Update 18:00 Bern, Switzerland (GenevaLunch) – France says it did not break any French laws in accepting stolen data from a Swiss branch of HSBC, and right-wing politicians in Paris called for Switzerland to be put onto an OECD black list of tax havens if the Swiss refuse to ratify a pending treaty with France over the theft. Switzerland says that France, in failing to provide judicial assistance in the matter, is not respecting the terms or spirit of the treaty.
The Swiss government late Wednesday 16 December said it intends to suspend the ratification of the new double taxation treaty with France. The news followed comments to the media by France’s budget minister, Eric Woerth, that he plans to start judicial proceedings based on information stolen from the Geneva branch of HSBC.
Swiss President Hans-Rudolf Merz says that he is asking the Swiss commission in charge of the ratification process, scheduled to meet in February, to hold off until the circumstances surrounding the theft, which took place in Switzerland, are clearer. The French citizen who stole the data has come forward publicly, and he is now being given a new identity in the south of France.
At issue for the Swiss: France has not responded to Switzrland’s repeated requests for judicial assistance, and no information has been provided about the stolen data. The theft, which started in July 2008 by an IT employee at the bank, is illegal under Swiss law. “In a state of law, this type of theft is unacceptable,” Merz told media Wednesday.
Geneva, Switzerland (GenevaLunch) – The French public prosecutor in Nice, southern France, Eric de Montgolfier, has revealed that his office is in possession of confidential details of up to 130,000 clients from HSBC’s private banking branch in Geneva. The data was acquired by the French state when Hervé Falciani, a former IT employee of the bank, left HSBC with the details stored on his laptop. Journal de Dimanche reports that 3,000 of the bank’s clients are French citizens.
The whistleblower, who is reported to have received a new identity and is said to be in hiding in fear of his life, told French public television that he acted out of idealism: “Either you bury your head in the sand or you try to do something about it.”
Only by prescription in South Korea © 2009 F. Hoffmann-La Roche Ltd
Basel, Switzerland (GenevaLunch) – Swiss drug giant Roche confirmed Friday, 6 November, it was under investigation by the South Korean Food and Drug Administration (FDA) for illegally helping British bank HSBC and other companies in South Korea to acquire the drug tamiflu. The FDA raided the local offices of Roche 4 November and seized documents and computer files. It is illegal to purchase tamiflu in South Korea without a medical prescription.
The growing number of companies, organizations and individuals hit hard and even completely wiped out by the massive fraud perpetrated by Bernard Madoff includes several charities, notably in the US, reports Reuters. HSBC became the latest bank to say it may have lost large sums to Madoff.
Switzerland (GenevaLunch, Fre) – UBS bank shares are on a roller-coaster ride, falling by more than 4% during trading Monday morning on rumours that the bank intends to sell its American subsidiary, Paine Webber. Newspaper 24 Heures quotes an analyst as saying that the rumours could be an indication that the bank has new problems. A week ago UBS shares rose abruptly amid rumours that HSBC was considering a takeover but the price has now slipped back to the pre-HSBC rumour level, at 21.7 at 14:20.
