RBS pays €23.8m to settle tax evasion inquiry into Coutts’ Swiss operation
Settlement with German prosecutors, which involves immunity for any current for former staff, is latest embarrassment for bailed-out bank
Royal Bank of Scotland is paying €23.8m (£17.3m) to German prosecutors to settle an investigation into tax evasion by part of Coutts, best known for being banker to the Queen.
The settlement is the latest embarrassment for the bailed-out bank. The investigation, which was only revealed earlier this year, covered a 10-year period until 2014 in the Swiss banking arm of Coutts.
RBS sold the Swiss operation to Union Bancaire Privée this year, after revealing that German prosecutors were investigating current and former employees of the private bank’s Zurich and Geneva offices.
It continues to own the domestic operation of Coutts, which was founded in 1692 and still uses the three gold crowns logo that John Campbell used as the bank’s sign when he set it up in the Strand, London. The operation looks after the Queen’s personal accounts and requires customers to hold £1m of free assets to stand a chance of opening an account.
The settlement with the German prosecutors in Düsseldorf is thought to have involved immunity for any current or former staff.
The investigation emerged in February when Ross McEwan, the RBS chief executive, said private banks had been too slow to clean up their businesses after the 2008 crisis.
He said at the time: “Any situation like this we take seriously … it is the reputation of our business. This is what has tarnished the banking industry and in my view private banks have taken far too long to catch up with the public’s expectations.”
RBS said on Wednesday: “Our Swiss bank, Coutts & Co Ltd, has reached a settlement with the German authorities to resolve this matter.”
Coutts’ Swiss operation is being investigated by US authorities over alleged tax avoidance. More than 100 banks are being investigated by the US authorities.
When RBS disclosed that the German prosecutors were investigating, it was during a period of heightened tension about tax avoidance following revelations about the activities inside HBSC’s private bank.
The Guardian and other publications published details of 100,000 accounts at HSBC’s Swiss banking business. The leaked information showed how HSBC clients might evade tax by moving their wealth around in “bricks” of cash and how the bank provided advice on tax avoidance.
Hervé Falciani, the former IT worker who leaked the information, was last month convicted in his absence by a Swiss court and sentenced to five years in prison. He is living in France, where he sought refuge from Swiss justice, and did not attend the trial.