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July 21, 2011 - Phil Hodgen

Text of HSBC India letter to its US customers

For those of you who have HSBC/India accounts, this is the letter that was sent in bulk from Mumbai to New York, then carefully sent out to all US customers via the US Postal Service. It was dated about a month ago. This letter is consistent with the letter sent out by UBS.

Dear Customer

As you may have read in recent press reports, the U.S. Internal Revenue Service (“IRS”) served a summons (the “IRS ‘Summons”) on HSBC Bank USA, NA (“HSBC USA”) seeking information with regard to financial accounts of U.S. persons maintained with The Hongkong and Shanghai Banking Corporation Limited, India (“HSBC India”).  The IRS summons reportedly seeks this information to determine whether such U.S. persons have complied with applicable U.S. tax reporting regulations.

In the interest of our customers. we would like to highlight that if you have any concerns about your U.S. tax reporting relating to your HSBC India account(s), you should consider consulting with a U.S. tax advisor to determine the appropriate course of action.

If you do have concerns about your U.S. tax reporting, you may wish to be aware of an IRS voluntary disclosure program, which encourages U.S. taxpayers to bring themselves voluntarily into compliance with the U.S. tax laws.  According to the IRS, voluntary disclosure enables taxpayers to become compliant and avoid substantial civil penalties, and generally eliminates the risk of criminal prosecution.  As part of this voluntary disclosure practice, on February 8, 2011, the IRS announced an “Offshore Voluntary Disclosure Initiative” or “OVDI” which includes a special penalty framework applicable to voluntary disclosures regarding unreported offshore accounts and entities. According to the IRS, the OVDI offers greater certainty regarding the applicable penalty structure and is designed to encourage U.S. taxpayers with offshore assets to take advantage of the IRS’s voluntary disclosure practice.

For details and further information on the IRS’s, general voluntary disclosure practice or the OVOI program in particular, including important deadlines that must be met in order to participate in the OVOI program, you may visit the IRS website at http://www.irs.gov/compliance/enforcement/article/0,,id=205909,00.html.  If you and your tax adviser decide that the OVDI program may be appropriate for you, you should note that the IRS has announced that the opportunity to participate in the OVDI program may be lost if the IRS has commenced or will commence an examination of your account before you advise the IRS of your intent to participate. The IRS has also announced that the OVOI program will close on August 31, 2011.

We will, upon request, provide your account statements to you should you require them in relation to the above. If you have any questions regarding this matter, you may contact us at nriservices@hsbc.co.in.

Yours sincerely,

Sanjay Nair
Head-Customer Propositions
Retail Banking and Wealth Management The Hongkong and Shanghai Banking Corporation Limited

 

Voluntary Disclosure