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Aug 30

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Swiss Banks No Longer a Haven?

Since 2009, the U.S. Department of Justice has charged more than 30 banking professionals and 68 U.S. accountholders with violations arising from their offshore banking activities, with ongoing investigations proceeding against 14 additional Swiss-based financial institutions.  In an effort to improve this process, the U.S. Department of Justice and the Swiss Federal Department of Finance jointly announced a program, summarized below, designed to encourage Swiss banks to cooperate in ongoing U.S. investigations tax evasion involving foreign bank accounts.

Only banks not currently under criminal investigation by the department for their offshore activities can participate.  In exchange for eligibility for non-prosecution agreements, participating banks must:

  • Agree to pay penalties of:
    • 20 percent of the maximum aggregate dollar value of all non-disclosed U.S. accounts that were held by the bank on Aug.1, 2008,
    • 30 percent for secret accounts between that date and February 2009 and
    • 50 percent for secret accounts opened thereafter
  • Make a complete disclosure of their cross-border activities
  • Provide detailed information on an account-by-account basis for accounts in which U.S. taxpayers have a direct or indirect interest
  • Cooperate in treaty requests for account information
  • Provide detailed information as to other banks that transferred funds into secret accounts or that accepted funds when secret accounts were closed
  • Agree to close accounts of account holders who fail to come into compliance with U.S. reporting obligations

Banks not engaged with improper activity can obtain a resolution of their status if they provide an internal investigation report by an independent examiner, and any supplemental information requested by the department.  A small group of banks will be allowed to show that they met certain criteria for deemed-compliance under the Foreign Account Tax Compliance Act (FATCA). The goal is to provide a path to resolution for all banks and thereby close this avenue for U.S. tax evaders going forward

 

About the author

Renee Howdeshell

Renee Howdeshell is a founding member of Fulcrum Inquiry, an accounting, finance and economic consulting firm that performs damage analyses for commercial litigation, forensic accountings, royalty & distribution audits, financial investigations, and business valuations. Ms. Howdeshell holds a degree in Finance and Marketing from the University of Virginia's McIntire School of Commerce and is a Certified Public Accountant (CPA) and a Certified Fraud Examiner (CFE). She has testified as an expert witness in federal court, CA state court and arbitration regarding the results of her work. She can be reached at (213) 787-4112 and her resume is available at www.fulcrum.com.

Permanent link to this article: http://betweenthenumbers.net/2013/08/swiss-banks-no-longer-a-haven/

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