Saturday, November 29, 2014

Argentina: Buenos Aires Seemingly Functioning as If It Were a "Banana Republic"

According to The Latin American Tribune, the Argentine treasury has charged the HSBC financial institution with helping 4,040 clients to evade taxes by placing their money in Swiss bank accounts, Ricardo Echegaray, the head of the country’s tax agency, has announced.

“We have filed a charge for tax evasion and illicit association relating to bank accounts in Switzerland. We denounce the existence of an illegal platform created by three banking entities (of HSBC) that are operating in Argentina,” said Echegaray at a press conference Thursday (November 27).

The head of the Federal Administration of Public Revenue (AFIP) revealed that the bureau had received the information about the secret accounts from France and that some of the accounts had been opened using dual nationality passports in order “to create another blind.”

The operations were facilitated through HSBC branches in Argentina, the US and Geneva and “dummy companies were created to transfer funds and evade taxes.”

The treasury head explained that the investigation enabled them to obtain data on the 4,040 Argentine corporations and individuals with accounts in the bank, although they had only been able to locate 300 of them thus far.

There is a minimum amount of $3 billion in these accounts, said Echegaray, who added that economic sanctions could exceed $7.2 billion dollars and the penalties include up to nine years in prison.

The tax bureau chief named HSBC Argentina president Gabriel Martino and a group of senior executives among those with undeclared Swiss accounts.

COMMENT: Perhaps President Christina Fernández has simply been head of state for too long or has been influenced by her own populist policies to the extent that she is now seeing “symbolic assailants” where non exist.

Indeed, why would HSBC Argentina President Gabriel Martino make the public assertions he has, knowing that the investigative resources of the Argentine government far outweigh those of his own.

Gabriel Martino is also aware of his fiduciary responsibilities under Argentine law.  

In separate statements, HSBC Argentina and Martino rejected the charges and denied having accounts in HSBC Switzerland.

“HSBC Argentina emphatically rejects (the charge) of its participation in any illicit association, including any organization that would allow the transfer of capital in order to evade taxes,” the bank said.

“HSBC Argentina wants to clarify that it doesn’t have an account in HSBC Switzerland,” it added.

Martino said that Echegaray’s accusations “are completely false” and “smear my reputation and honor.”

“I do not have an account in HSBC Switzerland or any other banking institution of that country,” said the manager, who stressed his “absolute and strict compliance with” his tax and legal obligations.

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