Coutts bank in Swiss tax investigation

The inquiry is being carried out by a German prosecuting authority.

RBS said the investigation was into Coutts & Co Ltd in Switzerland, and current and former employees: “for alleged aiding and abetting of tax evasion by certain Coutts & Co Ltd clients. Coutts & Co Ltd is co-operating with the authority.”

RBS told Channel 4 News that it is also conducting its own inquiry, and will crack down hard on any employee found to have done wrong.

The probe comes just weeks after it emerged that the Swiss arm of the HSBC bank had routinely allowed clients to evade tax, conceal assets, and even advised wealthy customers on how to circumvent domestic tax authorities.

Read more: HSBC tax secrecy timeline: who knew what, and when?

High net worth customers

Bankers to the Queen, Coutts is believed to demand that a prospective customer has £1m in investable assets, not including property, in order to become a client.

Tax planning is one of the services it offers. On the subject of “optimising tax efficiency“, Coutts’ website notes “No one likes to pay more tax than they have to but one of the challenges of wealth is the high taxation it attracts.”

In 2012 it was described by the Financial Service Authority (FSA) as “a gateway to the UK financial system for high net worth international customers.”

One of the world’s oldest private banks, Coutts has been trading for over 300 years, and is proud of its long history. Last month it sent out a tweet saying “200 years since the death of Emma, Lady Hamilton, famed mistress of Admiral Nelson – she was a Coutts customer”

Its first branch outside London was in Eton.

200 years since the death of Emma, Lady Hamilton, famed mistress of Admiral Nelson â?? she was a Coutts customer.

— Coutts (@CouttsandCo) January 15, 2015

However, in more recent years the bank has become part of a larger entity, joining with NatWest in 1990 and becoming the wealth division of the RBS group in 2000.

RBS is currently seeking a buyer for Coutt’s Swiss operation.

Money-laundering failure

In March 2012 the FSA fined Coutts £8.75m for failing to take reasonable care to establish and maintain effective money-laundering systems and controls in relation to high risk customers, known as politically exposed persons (PEPs).

Staff had been incentivised in part to increase the number of customers taken on. However its anti-money-laundering team “failed to provide an appropriate level of scrutiny and challenge.”

FSA investigations concluded that in some cases the bank had failed to “establish the source of the funds received at the outset of the high risk customer relationship wth Coutts.”

The FSA concluded that the failings at Coutts were “serious, systemic and were allowed to persist for almost three years.”