Argentina wants HSBC to repatriate $3.5 bln in offshore funds

(Adds background on charges, other probes, quotes from Argentine official and HSBC)

BUENOS AIRES/LONDON, March 9 (Reuters) - Argentina wants HSBC Holdings Plc (HKSE: 0005.HK - news) to repatriate $3.5 billion that it says the bank's Argentine branch moved offshore to help clients evade taxes and move capital abroad, the country's tax chief said on Monday.

The South American country last November charged HSBC with helping more than 4,000 clients evade taxes by stashing their

money in secret Swiss bank accounts. HSBC Argentina rejected the charge, saying it respected Argentine law.

Europe's largest bank already faces probes in several countries into allegations it helped its clients evade taxes.

"We would like to know, firstly if HSBC Holdings PLC supported the behaviour of the authorities of the Argentine branch," tax chief Ricardo Echegaray said on Monday, according to a copy of the speech he gave in Argentina's London embassy.

"Secondly, we expect the repatriation of funds by HSBC Holdings PLC, that to our knowledge amount to 3.5 billion dollars."

HSBC said in a statement it was cooperating with Argentine authorities in their probe.

"HSBC has been cooperating fully with Argentine regulators, including AFIP (the tax authority) and the judiciary, since allegations were first made public last year, and we will continue to do so," the bank said in a statement.

Britain has asked Argentina for information about its investigation into HSBC.

HSBC last month admitted failings in compliance and controls in its Swiss private bank after media reports alleged it helped wealthy customers conceal millions of dollars of assets in a period up to 2007. It added its Swiss business had been transformed since 2008 and client accounts closed.

Argentina also disclosed that on Sunday, it raided HSBC offices in Argentina and it has sent requests for information to tax authorities in "tax administrations in the Virgin Islands, Uruguay and Bermuda."

If HSBC clients were forced this year to cough up taxes they evaded by moving their funds offshore, the windfall would come at an opportune moment for Argentina's cash-strapped government.

The bank also faces investigation by U.S. authorities who have stepped up efforts to establish whether it helped Americans evade taxes.

In 2012, HSBC paid a record $1.9 billion fine after U.S. authorities said it had become the preferred financial institution for drug traffickers and money launderers between 2006 and 2010. (Reporting by Sarah Marsh in Buenos Aires and Chris Vellacott in London; Additional reporting by Eliana Raszewski and Nicolas Misculin; Editing by Chizu Nomiyama and Andrew Hay)