Posted: 18/03/2015HSBC is to close thousands of bank accounts on Jersey belonging to customers living in the UK.
Customers of the bank have been sent a letter saying: "We've taken the difficult decision to close all Jersey accounts for customers who don't live there. This is to comply with HSBC Group standards."
The bank has labelled the move a 'remediation exercise' and are telling customers that they must prove their identity and addresses as part of a crackdown on tax avoidance.
The bank says customers in the UK with HSBC expat accounts, which are also registered in Jersey, are not affected.
Asked about the move, Ian Gorst, Jersey's Chief Minister told BBC News that banks "have to comply with the legislation that we have in place.
"They strongly have to know who their customer is, where the funds have come from, (and) what they are doing with the funds," he said.
"If they are not able to able to satisfy themselves around those regulatory issues then they have to take decisions to close those accounts."
In 2012, HMRC began an investigation into a data leak at HSBC in Jersey which led to allegations that British residents may have used accounts to launder money or avid tax. The Daily Telegraph reported at the time that more than 4,000 British residents with accounts at HSBC Jersey included a well-known drug dealer and bankers facing fraud allegations.
HMRC said its inquiry is currently looking into 170 of the cases and expects to raise £10m-£20m in unpaid taxes and penalties. However, according to BBC News, no criminal prosecutions are likely to take place.