HSBC is contacting holders of Jersey accounts who live in the UK as part of efforts to avoid accusations that it is helping to shelter money from tax authorities.
Britain’s biggest bank has written to customers who hold Jersey accounts to ask them to take proof of identity to a branch on the island or risk having their accounts closed.
The move does not affect customers who hold offshore accounts through its HSBC Expat account operation.
The bank, under fire for helping customers of its Swiss bank avoid tax, said: “We continuously review details we hold on all our customers to ensure we have the information we need to protect them, together with wider society, against fraud and other financial crime.
“With financial crime becoming more sophisticated, keeping accurate, up-to-date information on customers such as complete proof of identity or address, helps us monitor transactions effectively for potential fraudulent activity.”
It is the latest move by HSBC to take risk out of its business and follows its decision to shut accounts for the Vatican, embassy staff and charities in recent months following its £1.2bn 2012 fine from US authorities for breaching money-laundering rules and allowing Mexican drug barons to move cash around the financial system.
Last July, HSBC faced criticism after three high-profile Muslim organisations, including Finsbury Park mosque, were told their accounts would be closed.
Other banks have also been taking steps to verify the identity and residence of their account holders in Jersey. Barclays said: “Barclays takes its responsibilities seriously, whether it is to ‘know our clients’ or through compliance with the range of agreements that Jersey has in place with tax authorities. We continually review our clients’ portfolios and circumstances to ensure that we remain compliant and that we are offering appropriate services.”
Revelations in the Guardian and other publications about the activities of HBSC’s Swiss operations have put a fresh focus on the tax avoidance practices of banks and their wealthy clients. Leaked details of accounts held at HSBC’s Swiss banking arm showed how the bank helped wealthy customers dodge taxes and conceal millions in assets, doling out bundles of untraceable cash and advising clients on how to circumvent domestic tax authorities.
