* Report attacks "weaknesses" in French tax evasion fight
* France investigating HSBC over tax allegations
By Lionel Laurent and Emile Picy
PARIS, July 10 France needs to beef up its
methods of fighting tax evasion, according to a parliamentary
report on a probe into HSBC that revealed $5 billion of
undeclared assets in thousands of Swiss bank accounts.
The report, published on Wednesday, looked at why it took
French authorities more than four years to begin an
investigation after a former HSBC employee gave them a list of
people who held money at the global bank's Swiss arm.
"The case of the HSBC list has shed light on the weaknesses
in our legal arsenal in the fight against systematic tax fraud,"
lawmaker Christian Eckert wrote in the report on behalf of the
National Assembly's finance committee.
France, like countries across the world, is cracking down on
tax after the global financial crisis put government budgets
under strain and increased the need to maximise tax receipts.
The country began a formal investigation into HSBC in April
over whether it sold products designed to avoid French tax.
French lawmakers, including Eckert, questioned ex-HSBC
employee Herve Falciani on July 2 as part of their inquiry.
Falciani, a Franco-Italian, is living in France after taking
refuge in Spain from Swiss authorities seeking his extradition
on charges of data theft.
An HSBC spokesman declined to comment on the report,
reiterating the bank's view that Falciani had stolen the client
data. However, he said the bank would study it.
The report described a variety of legal, technical,
diplomatic and procedural issues that began almost as soon as
Falciani gave five DVDs of data to the French tax authorities in
There were internal obstacles over the different remits of
the tax authorities and the prosecutor's office, which in 2010
transferred responsibility for the case from the Mediterranean
city of Nice to Paris.
The sheer size of the HSBC client list, which ran to 65
gigabytes over several formats, meant it took a year to extract
the names behind each client account, according to the report,
in a project dubbed "Operation Chocolate."
After the names were extracted it was found that there were
$5 billion in assets that had not been declared to French tax
Diplomatic setbacks also put investigators at a
disadvantage. The report said Switzerland could not be counted
on to give assistance because it was seeking Falciani's
Eckert, a leading figure on the parliamentary finance
committee, said in the report there was no evidence of any
tampering with evidence or pressure to scrub any names off the