Israel – Four Suspects Questioned on Unreported HSBC Accounts

The Israel Tax Authority has a list of 8,000 Israelis with accounts in HSBC Switzerland. Arrests are imminent.

At the Tel Aviv investigative tax assessment offices, an official investigation was opened yesterday into the accounts held by Israelis at the Swiss branch of HSBC, after the Israel Tax Authority obtained a list of 8,000 Israelis with such accounts.

As of now, four suspects from the same family were being questioned. The development of the investigation will determine whether the suspects are brought to court.

Over the past 18 months, since the global media reported the existence of a list of HSBC customers, the Tax Authority has been in contact with the French tax authority for the purpose of obtaining the list relevant to the bank’s Israeli customers.

On August 1, the Tax Authority announced that it had obtained the requested information about thousands of Israelis holding HSBC accounts, and that it was beginning to investigate the matter. Among other things, the Tax Authority is checking whether all the money held in the Israelis’ accounts in Switzerland was being reported as required.

The findings showed that some of the account owners had not reported their accounts, the money in them, and the sources of the funds.

The list came on top of other lists of Israelis with overseas bank accounts obtained by the Tax Authority in recent years. The most widely known of these was a list of UBS customers, the exposure of which led to the investigation of dozens of customers who failed to report their accounts, with the first indictments in the affair being filed recently.

The Tax Authority also acted in various areas following the publication of the Panama papers, and now has comprehensive information about Israelis who founded companies in Panama and other tax shelter countries.

By law, an Israeli citizen is entitled to keep an overseas bank account, but he must report it and the income derived from it (interest, dividends, capital gains, etc.) to the Tax Authority. The records include a wide variety of written evidence documenting the bank’s policy toward its customers.

In the first stage, which is slated to continue for a few months, the Tax Authority will examine and organize the material, and compare it to the reports made by those Israelis to the Tax Authority. In the process of organizing the documents, customers whose regular behavior towards the Tax Authority included reporting of the accounts will be identified, as well as those who reported the existence of accounts in the framework of the voluntary disclosure program.

Following legislation by the Knesset making serious tax violations predicate offenses under the Prohibition on Money Laundering Law, and in view of the large-scale response to the voluntary disclosure procedure, the Tax Authority announced a month ago that it had decided to extend the deadline for submitting voluntary disclosure requests in the framework of the administrative order for the procedure until the end of 2016.

The Tax Authority announced that 5,360 voluntary disclosure requests had been filed since the procedure was first announced in September 2014. NIS 18.6 billion in capital was revealed in these requests, and will enter the Tax Authority’s reporting systems.

Upon receiving the information about the HSBC accounts, Tax Authority head Adv. Moshe Asher stated, “Obtaining the list constitutes one of the significant results of the struggle against unreported capital, in addition to the legislation passed and other measures aimed at obtaining information about Israelis with overseas bank accounts and assets.

I take this opportunity to call on all Israelis with unreported capital in Israel and overseas who have not yet submitted a voluntary disclosure request to file one according to the procedure.”

For the account owners on the lists, this option is no longer available.

They cannot make a voluntary disclosure request, and cannot avoid criminal proceedings if they committed tax violations.

As soon as the Tax Authority began investigating the information it possesses, the protection afforded by a voluntary disclosure procedure cannot be obtained.

The investigation results are now beginning to emerge. It is believed that arrests of Israelis on the HSBC list are imminent.

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