Credit Suisse Bank has filed a legal proceeding in a Toronto court hoping to block the Canada Revenue Agency from examining 500 boxes of banking records as part of a probe into offshore tax evasion, a CBC News/Globe and Mail investigation has learned.
The Swiss Bank filed the application with the Federal Court of Canada last Wednesday. The bank's lawyers argued the court should overturn a previous decision by Justice Richard Mosley that had granted the agency permission to go through the documents.
Statement from Duncan King, spokesman for Credit Suisse
“Credit Suisse adheres to the highest ethical standards and has strict compliance guidelines. The Canada Revenue Agency (CRA) has made an extremely broad request for decades-old banking records of a business that was sold in 1998. The CRA request is based solely on the purported activities of one individual in 1993, acting at the direction of a third party. Canadian law requires certain conditions to be met before CRA can issue such a request and we do not believe that those legal conditions have been satisfied. Furthermore, we are very concerned about the personal and financial privacy interests of our clients.”
The bank argues the permission granted the Canadian tax department is "inordinately broad," and the Canada Revenue Agency should only be allowed access to specific cases for which it has strong evidence.
The documents at the heart of the controversy belonged to a Canadian subsidiary of Credit Suisse, which closed operations in 1998. Still, the Canada Revenue Agency has argued those documents could provide crucial evidence about a complicated offshore tax evasion scheme involving at least two Canadian banks.
In an affidavit filed in court, Canada Revenue investigator Russ Lyon referred to the case of "Taxpayer X," who admitted to using Credit Suisse to evade Canadian taxes, by setting up offshore accounts.
The government has until Nov. 27 to oppose the application by Credit Suisse.
Canada isn't the only country where Credit Suisse has come under scrutiny from tax officials. In July of this year, more than 100 police officers, prosecutors and auditors raided Credit Suisse offices in 13 cities across Germany looking for evidence of possible tax evasion.
And in 2007, Brazilian police raided several banks across the country for allegedly facilitating tax evasion, including Credit Suisse. Eight months later, Credit Suisse official Christian Peter Weiss was arrested in his Rio de Janeiro hotel room for allegedly operating an illegal money transfer scheme.
CBC News and the Globe and Mail recently reported that Andrew Saxton, now Conservative MP from North Vancouver, approved the transfer of $199,975 into a Swiss bank account in 1994 on behalf of a Canadian RBC Dominion Securities client in Victoria.
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There is no evidence that he knew the account was set up to ultimately evade taxes.
Saxton was the head of private banking for the Vancouver branch of Credit Suisse Canada from 1992 until 1994, when he left for a series of HSBC banking posts across Asia. He is now the parliamentary secretary to the Treasury Board after having been elected to Parliament in 2008.