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US Reaches Non-Prosecution Deals With Four Swiss Banks

by Leroy Baker,, New York

29 May 2015

The US Department of Justice (DoJ) has announced that four Swiss banks have reached a resolution with the Government under the DoJ Tax Division's regularization program.

The DoJ's Swiss Bank Program was signed by the two countries on August 29, 2013. It provides a framework for Swiss banks that were not already being investigated to resolve past "cross border criminal tax violations."

By cooperating with US authorities and disclosing detailed information on US account holders, Swiss banks are able to avoid prosecution but will still be subject to a significant fine of between 30 and 50 percent of the total sum of their US clients' undeclared assets.

According to the terms of the non-prosecution agreements signed on May 28, each bank agrees to cooperate in any related criminal or civil proceedings, demonstrate its implementation of controls to stop misconduct involving undeclared US accounts, and pay the penalties in return for the department's agreement not to prosecute these banks for tax-related criminal offenses.

Acting Assistant Attorney General Caroline D. Ciraolo of the Department of Justice's Tax Division said that the agreements "reflect the Tax Division's continued progress towards reaching appropriate resolutions with the banks that self-reported and voluntarily entered the Swiss Bank Program."

However, Ciraolo reiterated the Department's zero-tolerance stance on tax evasion. "The department is currently investigating account holders, bank employees, and other facilitators and institutions based on information supplied by various sources, including the banks participating in this Program. Our message is clear – there is no safe haven."

Under the Program, banks are required to:

  • Make a complete disclosure of their cross-border activities;
  • Provide detailed information on an account-by-account basis for accounts in which US 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 accountholders who fail to come into compliance with US reporting obligations; and
  • Pay appropriate penalties.

TAGS: compliance | tax | banking | offshore | agreements | offshore banking | banking secrecy | United States | penalties | Banking | Tax

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