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Argentina Economic Crisis: Nation's Central Bank Orders HSBC to Get New President

First Posted: Sep 02, 2015 04:39 PM EDT
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Photo : Mario Tama/Getty Images

Argentina's Central Bank has given HSBC Argentina 24 hours to name a new president and vice president.

The Central Bank has accused HSBC of failing to establish the necessary controls needed to prevent tax evasion and money laundering from occurring. 

Back in November, Argentine authorities charged HSBC with helping over 4,000 clients evade taxes by hiding fund in Swiss bank accounts. Despite the HSBC’s denial of this serious charge, Argentina announced it wanted HSBC to bring back to the country the $3.5 billion that Argentine tax authorities claimed they helped move to offshore accounts.

As reported in the BBC, HSBC responded to the demand issued by the Central Bank by stating HSBC Argentina has always operated “normally” in the country.

"HSBC Argentina complies with the laws and regulations that govern its activity in the country and will continue cooperating with the Justice and regulators in Argentina," the bank maintains.

As quoted in CNBC, Gabriel Martino, the president of HSBC, addressed the situation, saying he "had not directed the necessary measures to mitigate and adequately address the prevention of money laundering and the financing of terrorist activities."

Ricardo Echegaray, head of Argentina's AFIP tax agency, approves of the Central Bank’s punitive demands on HSBC. Chiding HSBC Argentina for trying to pull a fast one, Echegaray said, "They looked to cheat Argentina, to move funds abroad that they had never declared and on which they had never paid taxes."

Plagued with debt and inflation, Argentina’s economy is vulnerable but seems to be getting better.

"The economy seems to not be falling anymore," said Eugenio Aleman, a senior economist at Wells Fargo Securities, in May, according to CNN Money"There are a little bit more positive vibes going around."

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