News / Economy

Swiss Banks Agree to US Tax Deal

FILE - A woman walks past a building of the Swiss bank Valiant in Lucerne.
FILE - A woman walks past a building of the Swiss bank Valiant in Lucerne.
The first Swiss banks have signaled their readiness to work with U.S. officials in a crackdown on wealthy Americans evading taxes and many more are expected to follow in the coming weeks, in the latest blow to Switzerland's cherished bank secrecy.
The deal between the United States and Switzerland, agreed in August, is part of a U.S. drive to lift the veil of Swiss bank secrecy. In 2009, this led to UBS paying $780 million in a settlement where the bank agreed to hand over U.S. client names with secret Swiss accounts.
The U.S. pursuit of tax dollars sheltered in offshore accounts has piled pressure on Switzerland, the world's largest offshore finance center with more than $2 trillion in assets.
The Swiss government in June bowed to repeated attacks on banking secrecy, deeply embedded in the country's culture, and will share data on foreign depositors if a global standard is established.
Under this latest U.S. deal, Swiss banks were given until Monday by their regulator to say whether they would take part in the government-brokered program open to a host of second-tier Swiss banks.
The program, which lapses at year-end, requires the banks to hand out some previously hidden information and face penalties of up to 50 percent of assets they managed on behalf of wealthy Americans. If the banks shun the U.S. offer, individual firms and senior staff risk criminal prosecution.
The regulator FINMA said on Tuesday that most had done so, and that it expected several more to do so shortly, without disclosing what the banks had decided.
Valiant Holding and Berner Kantonalbank, two mainly retail banks, said they would come clean on any past transgressions and face up to fines.
The fines are scaled to reflect how egregiously the banks acted in their dealings with U.S. customers. Fines would have to be disclosed to investors because they could have an impact on share prices.
A third -- Zurich-based private bank and securities firm Vontobel Holding AG -- said it would also participate. But it put itself in a category of institutions that have not committed any U.S. tax-related offenses and are therefore exempt from penalty payments.
The bank began transferring business with wealthy Americans into an entity registered with the Securities and Exchange Commission in 2008, when the crackdown on Switzerland's banks intensified.
How many of Switzerland's 300-plus private banks come forward under the program is also key for banks facing criminal investigations, which includes some of Switzerland's biggest banks such as Credit Suisse and Julius Baer and Pictet & Cie.
A host of listed private banks such as EFG International and Banque Cantonale de Geneve said they had yet to make a decision. St. Galler Kantonalbank, which owns private bank Hyposwiss, said it had informed the Swiss regulator of intention, but would only tell investors what it had decided when it had been formalized by its board.
These publicly-listed banks, which are subject to disclosure rules, give the first indication of how many firms will cooperate with the U.S. authorities under the plan.
But most of Switzerland's private banks are not listed and under no obligation to make their decision public.
Major player Lombard Odier & Cie said it is still evaluating what to do. Others such as J. Safra Sarasin, Union Bancaire Privee and Mirabaud did not respond to request for comment on Tuesday.
A legal expert said FINMA's Monday deadline was merely intended to take the temperature of Swiss banks' intentions, and that they have three more weeks until the legally-binding deadline to take up the deal lapses.
“I think roughly 100 banks will end up coming forward - the coming weeks will show how many succumb to the pressure,” Peter V. Kunz, professor of business law at Berne University, said.
A failure to cooperate could also hold up a settlement for Credit Suisse, Julius Baer, Pictet, and local government-backed Zuercher Kantonalbank (ZKB), which have seen settlement talks with U.S. justice officials frozen pending a solution for the wider industry.

You May Like

Video Russia’s Syrian Escalation Tests Obama’s Crisis Response

Critics once again question whether president has been slow to act on Syrian conflict, thus creating opening for powers like Russia More

Ancient African DNA Shows Mass Migration Back Into Africa

First genetic analysis of ancient human remains in Africa suggests massive migration from north around time of Egyptian empire More

NASA: Pluto Has Blue Sky

New photos also reveal the presence of water ice More

Featured Videos

Your JavaScript is turned off or you have an old version of Adobe's Flash Player. Get the latest Flash player.
Hungary Criticized for Handling of Refugeesi
Henry Ridgwell
October 08, 2015 8:02 PM
Amnesty International has accused Hungary of breaking multiple international and European human rights laws in its handling of the refugee crisis. As Henry Ridgwell reports, thousands of migrants and refugees continue to travel through the Balkans to Hungary every day.

Video Hungary Criticized for Handling of Refugees

Amnesty International has accused Hungary of breaking multiple international and European human rights laws in its handling of the refugee crisis. As Henry Ridgwell reports, thousands of migrants and refugees continue to travel through the Balkans to Hungary every day.

Video Iraqi-Kurdish Teachers Vow to Continue Protest

Sixteen people were injured when police used tear gas and rubber bullets to disperse teachers and other public employees who took to the streets in Iraq’s Kurdish north, demanding their salaries from the Kurdish Regional Government (KRG). VOA’s Dilshad Anwar, in Sulaimaniya, caught up with protesting teachers who say they have not been paid for three months. Parke Brewer narrates his report.

Video Syrian Village Community Faces Double Displacement in Lebanon

Driven by war from their village in southwestern Syria, a group of families found shelter in Lebanon, resettling en masse in a half-built university to form one of the biggest settlements of its kind in Lebanon. Three years later, however, they now face being kicked out and dispersed in a country where finding shelter as a refugee can be especially tough. John Owens has more for VOA from the city of Saida, also known as Sidon.

Video Bat Colony: Unusual Tourist Attraction in Texas

The action hero Batman might be everyone’s favorite but real bats hardly get that kind of adoration. Put more than a million of these creatures of the night together and it only evokes images of horror. Sarah Zaman visited the largest urban bat colony in North America to see just how well bat and human get along with each other.

Video Device Shows Promise of Stopping Motion Sickness

It’s a sickening feeling — the dizziness, nausea and vomiting that comes with motion sickness. But a device now being developed could stop motion sickness by suppressing certain signals in the brain. VOA’s Deborah Block reports.

Video Making a Mint

While apples, corn, and cranberries top the list of fall produce in the US, it’s also the time to harvest gum, candy, and toothpaste—or at least the oil that makes them minty fresh. Erika Celeste reports from South Bend, Indiana on the mint harvest.

Video Activists Decry Lagos Slum Demolition

Acting on a court order, authorities in Nigeria demolished a slum last month in the commercial capital, Lagos. But human rights activists say the order was illegal, and the community was razed to make way for a government housing project. Chris Stein has more from Lagos.

Video TPP Agreed, But Faces Stiff Opposition

President Barack Obama promoted the Trans-Pacific Partnership on Tuesday, one day after 12 Pacific Rim nations reached the free trade deal in Atlanta. The controversial pact that would involve about 40 percent of global trade still needs approval by lawmakers in respective countries. Zlatica Hoke reports Obama is facing strong opposition to the deal, including from members of his own party.

Video Ukranian Artist Portrays Putin in an Unusual Way

As Russian President Vladimir Putin was addressing the United Nations in New York last month, he was also being featured in an art exhibition in Washington. It’s not a flattering exhibit. It’s done by a Ukrainian artist in a unique medium. And its creator says it’s not only a work of art - it’s a political statement. VOA’s Tetiana Kharchenko has more.

Video Nano-tech Filter Cleans Dirty Water

Access to clean water is a problem for hundreds of millions of people around the world. Now, a scientist and chemical engineer in Tanzania (in East Africa) is working to change that by creating an innovative water filter that makes dirty water safe. VOA’s Deborah Block has the story.

Video Demand Rising for Organic Produce in Cambodia

In Cambodia, where rice has long been the main cash crop, farmers are being encouraged to turn to vegetables to satisfy the growing demand for locally produced organic farm products. Daniel de Carteret has more from Phnom Penh.

Video Botanists Grow Furniture, with Pruning Shears

For something a bit out of the ordinary to furnish your home, why not consider wooden chairs, crafted by nature, with a little help from some British botanists with an eye for design. VOA’s Jessica Berman reports.

VOA Blogs

World Currencies


Rates may not be current.