HSBC is closing scores of accounts in Jersey held by people who do not live on the island.
The move is part of a push by UK banks to check the identity and addresses of thousands of their customers across the Channel Islands.
We welcome any move banks take to manage risksJohn Harris
The review comes amid pressure on banks to ensure that offshore accounts are not being used to hide money from HM Revenue & Customs (HMRC).
HSBC is writing to people who have accounts in Jersey but do not live there and advising them to open accounts closer to their home addresses.
Customers have been sent a letter which states: “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 said customers in the UK with HSBC expat accounts, which are also registered in Jersey, are not affected.
It said: “Whilst we cannot comment on individual cases, HSBC has implemented numerous standards designed to prevent its banking services being used to evade taxes or launder money, and we have exited clients who do not meet those standards or where we have concerns in relation to tax compliance.”
In 2012, HMRC began an investigation into a data leak at HSBC in Jersey which led to allegations that UK residents may have used accounts to launder money or evade taxes.
John Harris, director general of the Jersey Financial Services Commission, said: “We welcome any move banks take to manage risks and comply with international standards. The number of bank accounts in Jersey has shrunk over the last couple of years, but this is only by around 1 or 2 per cent.
“We have taken a strong stand against tax evasion.”
The move comes after HSBC chief executive Stuart Gulliver apologised for the “unacceptable” tax avoidance activities linked to the bank’s Swiss arm in the mid-2000s.
Jersey’s chief minister, Ian Gorst, said banks “have to comply with the legislation that we have in place”.
He added: “They strongly have to know who their customer is, where the funds have come from, [and] what they are doing with the funds. If they are not able to satisfy themselves around those regulatory issues, then they have to take decisions to close those accounts.”
The move is part of a wider process known as “de-risking” under which banks are attempting to comply with a series of global anti-fraud rules.
The Swiss arm of HSBC is charged with helping around 30,000 account holders with funds totalling almost £78 billion to hide these assets from the tax authorities in their home countries. Almost 7,000 account holders are understood to be UK clients, who held £14.6 billion.
Among those alleged to have been exposed as having accounts with the Swiss arm of HSBC are said to be politicians and sports stars.
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