The HSBC scandal and the Middle East

What we know so far

By Brian Whitaker

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 Switzerland, because of its secretive banking system, has long been a haven for dictators and criminals to stash their ill-gotten gains, as well as a place where the wealthy have accounts in order to avoid – or evade – paying tax in their home countries.

Over the last few days leaked files relating to some 100,000 HSBC clients and accounts in Switzerland have been causing a huge stir in Europe, mainly because of tax-dodging by some prominent figures and HSBC's apparent connivance in it.

The leaks also revealed billions of dollars deposited with HSBC in Switzerland by clients from the Middle East, and so far these have not received much media attention. This blog post is an attempt to compile what is known so far about the thousands of accounts which have a Middle East connection.

Making use of data published by the International Consortium of Investigative Journalists (ICIJ), I have produced a list showing the size of deposits, plus numbers of clients and accounts relating to countries in the Middle East. The list covers Arab League countries, plus Israel and Iran.

This is followed by a detailed list of the prominent Middle East clients so far identified by ICIJ. They include the kings of Morocco and Jordan, the sultan of Oman, Prince Bandar of Saudi Arabia and Rami Makhlouf, the Syrian cousin of President Assad.

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The bank accounts, country by country

Algeria
$671m; 440 clients, 1,148 accounts.
Largest client: $34m

Bahrain
$196m; 146 clients, 197 accounts.
Largest client: $66m

Djibouti 
$3.9m; 14 clients, 20 accounts.
Largest amount: $3m

Egypt 
$3.5 billion; 700 clients, 1,478 accounts.
Largest client: $856m

Iran
$1.5billion; 573 clients, 1,132 accounts.
Largest client: $255m

Iraq 
$525m; 243 clients, 477 accounts.
Largest account: $191m

Israel
$10 billion; 6,554 clients, 9,769 accounts.
Largest client: $1.5 billion

Jordan 
$843m; 679 clients, 738 accounts.
Largest client: $786m

Kuwait 
$1.1 billion; 475 clients, 674 accounts.
Largest client: $162m

Lebanon 
$4.8 billion; 2,998 clients, 4,450 accounts.
Largest client: $237m

Libya 
$522m; 190 clients, 566 accounts.
Largest client: $79m

Mauritania 
$12m; 21 clients, 66 accounts.
Largest client: $6.5m

Morocco 
$1.6 billion; 1,068 clients, 2,200 accounts.
Largest client: $74m

Oman 
$300m; 276 clients, 507 accounts.
Largest client: $34m

Palestine 
$149m; 55 clients, 97 accounts.
Largest client: $52m

Qatar 
$328m; 109 clients, 153 accounts.
Largest client: $98m

Saudi Arabia 
$5.8 billion; 1,504 clients, 2,762 accounts.
Largest client: $704m

Somalia 
$16m; 7 clients, 22 accounts.
Largest client: $12m

Sudan 
$131m; 62 clients, 209 accounts.
Largest client: $18m

Syria 
$1.3 billion; 690 clients, 1,281 accounts.
Largest client: $226m

Tunisia 
$554m; 256 clients, 679 accounts.
Largest client: $73m

UAE 
$3.5 billion; 1,126 clients, 1,702 accounts.
Largest client: $800m

Yemen 
$193m; 70 clients, 215 accounts.
Largest client: $56m

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Some prominent clients

Bahrain: Prince Salman

Salman is crown prince of Bahrain, deputy prime minister and commander-in-chief of the defence forces. ICIJ says:

"HSBC internal records list Prince Salman as client since 2001. HSBC files show that he was beneficial owner of two client accounts: Vision Macro Fund Ltd, of which he had an 11 percent stake and Vision Arbitrage Fund Ltd, of which he had a 9 percent stake. The two client accounts linked him to at least 10 bank accounts that together held as much as $20.9 million in 2006/2007. Of this, his balance was of $2.2 million.

"A spokesman for the Crown Prince said, 'The Crown Prince invested in a regional hedge fund over which he exercised no control and obtained no tax advantage'."

Djibouti: Said Ali Coubeche

Coubeche, who died in 2009, was a senior politician and businessman. ICIJ says:

"Coubeche was an HSBC client between 1994 and 2004. He was linked to a client account under the name Maskali, the name of a group of Djibouti islands in the the Gulf of Tadjoura. HSBC records linked him to two postal addresses: one based in Switzerland and one in Djibouti. The leaked files do not specify the exact role that he had in relation to the account."

Egypt: Rachid Mohamed Rachid 

Rachid served as Egypt’s minister of trade and industry under Mubarak. Previously he was president of Unilever for North Africa, the Middle East, and Turkey and was a director of HSBC Egypt. ICIJ says:

"Listed as 'President of Unilever for MENA + Turkey', Rachid Mohamed Rachid became an HSBC client in 2003. He was beneficial owner of a client account under the name Lexington Investments Limited that listed 10 bank accounts. Together they held as much as $31 million in 2006/2007.

"Rachid did not respond to ICIJ's repeated requests for comment."

Jordan: King Abdullah

ICIJ says:

"Jordan’s King Abdullah II became an HSBC client in 2006. Abdullah II was connected to a client account created in 2004 under the name of a senior palace official. Three bank accounts were linked to it. The maximum amount in the account in 2006/2007 was $41.8 million. The leaked files do not specify the exact role that King Abdullah II had in relation to the account.

"King Abdullah II's lawyers in the US told ICIJ that the king is exempt from paying tax and that the account was for official business."

Morocco: King Mohammed

ICIJ says:

"Mohammed VI became an HSBC client in 2006. According to the bank’s internal files, Morocco’s King was linked to numbered client account 45500MK served by five bank accounts that together held as much as $9.1 million in 2006/2007. Other family members were also HSBC clients. The leaked files do not specify the exact role that Mohammed VI had in relation to the account.

"King Mohammed VI did not respond to ICIJ's repeated requests for comment."

Oman: Sultan Qaboos

ICIJ says:

"Sultan Qaboos became an HSBC client in 1974. He was linked to four client accounts that listed 10 bank accounts. Together they held as much as $44.6 million in 2006/2007. Of the four client accounts, two had his name, one was a numbered account, and the other one was under the name of The Yacht Squadron Oman Limited of which he was beneficial owner. The leaked files do not specify the exact role that Sultan Qaboos had in relation to the other three accounts.

"Sultan Qaboos did not respond to ICIJ's repeated requests for comment."

Saudi Arabia: Prince Bandar

Bandar is a former Saudi ambassador to the US. During the 1980s he was also a central figure in the controversial Al-Yamamah British-Saudi arms deal. ICIJ says:

"HSBC records show Prince Bandar, became an HSBC client in June 1999. He was connected to four client accounts. He was the beneficial owner of one named Kafinvest Operating Limited opened in 2005. The client account listed three bank accounts that together held as much as $15.6 million in 2006/2007. Of the other three client accounts, two were closed in 2000 and the third reported a balance of zero.

"Prince Bandar did not respond to ICIJ's repeated requests for comment."

Syria: Rami Makhlouf

Makhlouf is a cousin of President Assad and is said to be Syria's richest man. ICIJ says:

"Makhlouf’s individual HSBC file linked him to at least 18 bank accounts connected to 14 client accounts. Six of them were numbered accounts. At their combined maximum in 2006/2007, these 14 accounts held over $27.5 million. He was beneficial owner of three of them: Polter Investments Inc; Lorie Limited, set up in 1999 and closed in 2004; and Drex Technologies S.A., which was registered in Luxembourg and was sanctioned in 2012 by several countries including the United States and Canada and by the European Union.

"Despite repeated attempts, Rami Makhlouf could not be reached for comment."

Tunisia: Belhassen Trabelsi 

Trabelsi is brother-in-law of ex-President Ben Ali and now lives in Canada. ICIJ says:

"Trabelsi became an HSBC client in 2006. He was listed as beneficial owner of three bank accounts under the name of Zenade Resources Limited, that held as much as $2,837,034 in 2006/2007. HSBC records also tied him to the numbered account 48451MH which listed four bank accounts and held as much as $22,083,647 in 2006/2007. The leaked files do not specify the exact role that Trabelsi had in relation to this numbered account created in 2006. 

"Trabelsi did not comment to ICIJ's repeated requests for an official comment."