Argentina demands HSBC repatriate $3.5bn of offshored client funds

Argentina is demanding HSBC repatriate the cash it helped its clients move offshore to dodge taxes.

Ricardo Echegaray, the head of Argentina's tax authority, Afip, wants the bank to repay $3.5bn (£2.3bn, €3.2bn), claiming its actions threatened the stability of the country.

Echegaray noted that tax officials had identified 4,040 undisclosed bank accounts held by Argentine individuals and companies in Switzerland through HSBC's Geneva subsidiary. Afip has already begun legal proceedings against the account holders for criminal tax evasion.

"HSBC built a platform to help clients evade tax," Echegary said in a press briefing at the Argentine embassy in London.

"Without tax collection, there is no government, there is no public policy, there is no State, that is to say there is no country."

An international collaboration of news outlets, including the Guardian, the French daily Le Monde, BBC Panorama and the Washington-based International Consortium of Investigative Journalists, citing leaked secret bank account files, had revealed that the bank's Swiss arm helped wealthy customers across the globe dodge taxes and hide millions of dollars worth of assets.

The news outlets obtained the data from Herve Falciani, a former IT employee of HSBC's Swiss private bank, who was charged in Switzerland with industrial espionage and breaching the country's secrecy laws.

Earlier, the Central Bank of Argentina temporarily suspended HSBC's subsidiary from transferring money and assets abroad for a period of 30 days.

Responding to Echegaray's demand, HSBC said it did not violate Argentine laws.

"HSBC has been cooperating fully with Argentine regulators, including AFIP and the judiciary, since allegations were first made public last year, and we will continue to do so," the bank said in a statement.

Following the leaks, the bank admitted its Swiss subsidiary had failed to comply with regulations.