BusinessBanking & Finance

Over 100 Swiss banks seek amnesty for helping Americans evade tax

More institutions than expected will tell how they helped American clients hide their assets

PUBLISHED : Monday, 27 January, 2014, 4:23am
UPDATED : Monday, 27 January, 2014, 6:14am

The top US tax prosecutor says 106 Swiss banks are seeking US amnesty for helping American clients evade taxes.

US prosecutors gave more than 300 Swiss banks until December 31 to seek non-prosecution agreements if they have "reason to believe" they violated tax laws. Banks must disclose how they helped Americans hide assets, hand over data on undeclared accounts and pay penalties.

The programme is the largest assault in a five-year US crackdown on offshore tax evasion.

Kathryn Keneally, assistant attorney general in the Justice Department's tax division, disclosed the number yesterday while cautioning that the final figure could change.

She did not name any banks seeking entry into the programme, which is not open to 14 already under criminal investigation, including Credit Suisse, HSBC and Basler Kantonalbank.

"She said 106 Swiss banks had signed letters of intent," said Bryan Skarlatos, of Kostelanetz & Fink in New York, who heard her speak at a conference in Phoenix, in the US state of Arizona.

"That was more than most people expected. It's a result of the banks' desire to have some certainty regarding their status with DOJ. I believe that DOJ is pleased with the response to the programme so far."

Keneally declined to comment on the amnesty programme after speaking to the American Bar Association's taxation section.

"She said that every new bank in the programme is a new source of information, especially on where the money went, either to other Swiss banks or banks around the world," said Josh Ungerman of Meadows Collier Reed Cousins Crouch & Ungerman in Dallas, Texas. "She said there are a lot of avenues to get information, and some are visible and some are not so visible."

Banks in Switzerland, the largest cross-border financial centre with US$2.2 trillion of assets, closely examined accounts before seeking to join the disclosure programme.

"The takeaway is the US has been successful in getting Swiss banks to really start co-operating and enter into non-prosecution agreements," said Martin Press, a tax lawyer in Florida.

The Swiss government encouraged banks to join the programme, announced in August. The Swiss Bankers' Association criticised the programme's cost and vexing questions, such as who qualifies as a US client and what assets are considered untaxed. The answers could determine how much a bank pays in penalties.


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