Finance Minister Eveline Widmer-Schlumpf, who negotiated the deal with Washington, made a last minute appeal today to the banks, urging them to join the program.
Several cantonal banks announced today, Monday December 16, 2013, that they will be taking part in the US tax declaration program which should enable them to escape prosecution for not revealing information regarding possible US tax evaders.
The larger financial institutions include:
- St. Gallen
- Geneva and
They collectively, acting upon the advice of Swiss Financial Market Supervisory Authority (FINMA), have opted to place themselves in Category 2, on the grounds that they cannot rule out the possibility that they may have clients who evaded taxes in the US.
The cantonal banks of:
- Basel Country
- Glarus and Uri
chose Category 4, stating that they did not have US residents as clients and had very few clients with an American passport. In fact Fewer than 2% of all of Bank Schwyz’s customers came from outside of Switzerland or the EU.
Swiss banks have until the end of the year to take part in the deal struck with the US and signed in August. Our previous post "Swiss Banks Agree to Plan to End Past US Tax Evasion Issues!" describes the banks penalty framework as:
20 per cent of the maximum aggregate value of all undeclared US accounts that existed on 1 August 2008,
30 per cent of the maximum aggregate value of the accounts opened between 1 August 2008 and 28 February 2009, and
50 per cent of the maximum aggregate value of accounts opened after 28 February 2009.
The new US-Swiss agreement will also require disclosure, to the United States, of the US financial institutions, US persons and the intermediaries who guided the US persons, who where connected with “US Related Accounts” that were maintain by the Swiss Banks.
This exposes the institutions and persons to possible prosecution for Conspiracy to Commit US Tax Evasion and, for the individuals, Failure to File the Foreign Bank Account Report.
There is a major probability that the US persons who have or had accounts at Swiss banks were not all just tax evaders, but who also are or were hiding the proceeds of crimes committed in the United States, such as public corruption, fraud, money laundering and others.
These persons now have a higher probability of being prosecuted for these crimes and of having their Swiss money be the subject of asset recovery efforts by the US government or private sector victims.
In any case, all US persons who are Swiss account holders will have to answer to the IRS, which has a wide array of tools to determine the source and destination of funds.
In a statement announcing the agreement, Deputy Attorney General, James M. Cole said...
“Now is the time for all US taxpayers who hid behind Swiss bank secrecy laws or have undeclared offshore accounts in other… countries to come forward and resolve their outstanding tax issues with the United States.”
The US Can Use Swiss Data for Enforcement Actions! The new agreement makes clear that “personal data provided by the Swiss banks… will be used and disclosed only for purposes of law enforcement (which may include regulatory action) in the United States or as otherwise permitted by US law.”
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