Argentina orders HSBC to sack local chief over terrorist financing, money laundering allegations

© Bobby Yip
Argentina’s central bank has ordered HSBC to remove its local CEO within 24 hours over his alleged failure to thwart terrorist financing, money laundering, and tax evasion.

In March, Argentinian authorities ordered HSBC to return a mammoth $3.5bn (£2.3bn) from an array of accounts nestled offshore.

Argentina had accused the scandal-ridden bank of assisting over 4,000 clients in evading taxes by funneling their illicit cash to secret bank accounts in Switzerland. But HSBC has consistently denied the allegations, insisting that it respects Argentine law.

Nevertheless, on September 1 the Central Bank of Argentina demanded that HSBC’s regional president Gabriel Martino and vice president Miguel Angel Estevez both be removed from their roles. It argued neither Martino nor Angel Estevez had taken adequate measures to thwart “money laundering and the financing of terrorist activities.”

The head of Argentina’s tax authority Ricardo Echegary welcomed the move as a “healthy decision.”

“They will have to recognize that together with Martino, and the HSBC authorities here in Argentina, they looked to cheat Argentina, to move funds abroad that they had never declared and on which they had never paid taxes,” he said.

However, HSBC has failed to respond directly to the Central Bank of Argentina’s call. In a statement released on September 2, the bank said it will continue to function normally. “The executive functions of HSBC Bank Argentina SA continue to be carried out by its general manager, Andres Hammar Aldatz, who was approved by the central bank on 28 May,” it added.

HSBC is currently facing investigations in several states over allegations it helped clients evade and avoid taxes.

In February, it emerged that HSBC’s Swiss private banking arm had aided royalty, criminals, terrorists and drug dealers in dodging taxes. The allegations were made by ex-HSBC employee and whistleblower Herve Falciani.

A colossal cache of files leaked by Falciani to the International Consortium of Investigative Journalists (ICIJ) shed light on these practices. The files reportedly revealed the bank’s complicity in tax evasion and aggressive tax avoidance between 2005 and 2007.

Despite HSBC’s global transgressions, no criminal proceedings have been brought against the bank in Britain.