Bank Money Laundering

 

Vocabulary

hide	spot (3)	shelter (2)
insist	minimal	subsidiary
illegal	indicate	revelation
worth	function	clientele
dodge	credible	branch (2)
haven	reveal	tax-haven
dodge	unwind	foundation
allege	offshore	headquarters
gem	weapon	account (3)
fuss	evasion	discussion
globe	demand	responsible
ethics	absurd	nonsense
admit	leak (2)	problematic
error	claim	distribute

 
 

 
 

 
 

 
 

 
 

 
 
 

 
 
 
 
 
 

Video

 
 

Transcript

The Caribbean. The perfect vacation spot to really relax and unwind.

And because taxes are so low and financial control so minimal, it’s also a great place — to hide money.

The money comes from the Swiss subsidiary of the British bank, HSBC.

The latest Swiss Leaks revelations indicate that HSBC in Geneva supported its clients in their illegal business dealings for years.

Gian Trepp, Swiss Banking Expert: “The English parent company bought this bank for $10 billion in 1999 because it wanted this type of clientele. Otherwise it would not have spend that kind of money.”

It’s linked to some 100,000 clients worth a total of more than €100 billion.

The HSBC system functions like this:

Anyone who wanted to, for instance, dodge taxes from home opened an account at HSBC’s Geneva branch.

The client would be given a numbered account, which could then be used to open numerous subaccounts, and the money could be distributed among them all.

Additionally, clients could shelter their money in a foundation with headquarters in an offshore tax-haven.

But HSBC didn’t just help its clients with traditional tax dodging: its bankers also allegedly helped launder money.

For instance, the files revealed that money from blood-diamond trafficking was invested with the bank.

Several thousand gem dealers are listed as clients in HSBC’s Swiss bank. Money from drug trafficking was also found in the bank’s accounts.

And even weapon’s dealers are said to be clients including top-level financial backers of the terrorist group Al-Qaeda.

Gian Trepp, Swiss Banking Expert: “The bank is clearly guilty. It would be one thing if there were a few cases; but there were 100,000.

That means they were clearly looking for this kind of business: tax evasion and money laundering.”

Most of the roughly 100,000 clients mentioned in the files are from Switzerland. The next largest groups are from France and Britain.

But the services of the Geneva branch were in demand around the world, especially in Brazil, the United States and Mexico.

HSBC also had a large number of clients in South Africa. And Saudi Arabia.

But there were customers from nearly every countries across the globe.

Former Credit Suisse manager, Hans Geiger, doesn’t see what all the fuss is all about.

Hans Geiger, Former Credit Suisse General Director: “The bank is not responsible for all its clients’ business dealings. We’re having this impossible discussion on taxes, and people are trying to make banks responsible for making their clients pay their taxes.

Which is absurd.

It doesn’t work that way. It isn’t ethics; it’s just political nonsense.”

This week HSBC admitted to errors in the past and insist that it has ended its relationship with problematic clients.

But just how credible are those claims?

Questions

1. The main point about the Caribbean was that it is a great holiday destination. Is this right or wrong?

2. Was the HSBC’s subsidiary in Switzerland clean and honest? How did the public find out about it’s dealings?

3. The HSBC Headquarters in London bought a Swiss bank. According to the Swiss bank expert, why did HSBC buy a Swiss bank?

4. If someone wanted to avoid paying taxes, what could he do?

5. The Swiss HSBC bank officials may have assisted the tax evaders and laundered money. True or false? What are some sources of the “dirty money”?

6. Where do the money come from? Are some countries overrepresented? Why sort of activity happens there?

7. The former director of the Credit Suisse Bank said they are fighting and preventing money laundering and tax evasion. Yes or no?

8. Has the Swiss branch of HSBC taken any steps to combat money laundering?
 
 

A. How might bank officials feel about money laundering?

B. What can you say about Swiss banks and the Swiss banking system?

C. Would you like to have a Swiss bank account?

D. Is money laundering good or bad for businesses and the economy?

E. Why is there money laundering? How can money laundering be prevented, avoided or stopped?