Mon, Dec 02, 2013 - Page 15 News List

Swiss say banks can work alongside US on tax issue

Bloomberg

The Swiss government said it has authorized a first group of banks to cooperate with US authorities to help settle a dispute over tax evasion.

“The [Swiss] Federal Council gave various banks authorization to cooperate,” the government in Bern said in a statement on its Web site on Friday, without disclosing the number or names of lenders.

Banks were “encouraged” to give “serious consideration to their participation in the program and to make their decisions in this regard in a timely manner,” it said.

Switzerland in August agreed to a draft plan with the US, ending more than two years of negotiations over US probes of at least a dozen banks, including Credit Suisse Group AG and Julius Baer Group Ltd, which allegedly helped Americans evade taxes. Under the agreement, banks not already under US investigation are able to disclose wrongdoing voluntarily and turn over account information on clients to avoid fines.

UBS AG, Switzerland’s largest bank, avoided prosecution by paying US$780 million in 2009, admitting it helped Americans evade taxes and handing over data on 4,500 accounts. Wegelin & Co, the oldest Swiss private bank, pleaded guilty in January and paid US$74 million. It has since closed its doors. Since 2009, the US has prosecuted 68 account holders and more than 30 banking professionals for offshore tax crimes.

Switzerland increased private cross-border financial assets to US$2.2 trillion last year, Boston Consulting Group said in a report in May. Total assets under management at Swiss banks increased by 320 billion Swiss francs (US$354 billion) to SF5.6 trillion last year, with the proportion of foreign assets unchanged at just over 50 percent, according to the Basel, Switzerland-based Swiss Bankers Association.

Swiss banks that seek to avoid prosecution for fostering tax evasion through secret accounts held by US clients face penalties of as much as 50 percent of the value of those assets under the plan announced in August. Credit Suisse and Julius Baer have both said they expect to pay a fine and hand over client information to resolve the probes.

Firms “that have to assume they have violated US law” have until the end of the year to notify US authorities that they wish to participate in the program, the government said.

“Banks must comply with applicable Swiss law, particularly data protection and employment law provisions, within the framework of their cooperation,’’ it said.

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