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.
Reuters
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

For Lebanon-based Refugees, Desperation Fuels Perilous Passage

In a war that has caused an estimated three million people to flee Syria, efforts to make perilous sea journey in search of asylum expected to increase More

South African Brewer Tackles Climate Change

Mega-brewer SAB Miller sent delegates to climate summit in Peru, says it is one of many private companies taking their own steps to fight climate change More

Indonesia Reports Increase in Citizens Joining Islamic State

Officials say more than 350 of its citizens are now in Syria or Iraq to fight with Islamic State - 50 more than last month More

Featured Videos

Your JavaScript is turned off or you have an old version of Adobe's Flash Player. Get the latest Flash player.
Will Pakistan School Shooting Galvanize Pakistan Against Extremism?i
X
Ayesha Tanzeem
December 17, 2014 11:54 AM
The attack on a military school in Pakistan’s northwest city of Peshawar left 141 dead, including 132 children. Strong statements of condemnation poured in from across the world. The country announced three days of mourning, and the leadership, both political and military, promised retribution. VOA's Ayesha Tanzeem looks at how likely the Pakistani government is to clamp down on all extremist groups.
Video

Video Will Pakistan School Shooting Galvanize Pakistan Against Extremism?

The attack on a military school in Pakistan’s northwest city of Peshawar left 141 dead, including 132 children. Strong statements of condemnation poured in from across the world. The country announced three days of mourning, and the leadership, both political and military, promised retribution. VOA's Ayesha Tanzeem looks at how likely the Pakistani government is to clamp down on all extremist groups.
Video

Video ‘Anti-Islamization’ Marches Increase Tensions In Germany

Anti-immigrant rallies in Germany have been building in recent weeks, peaking Monday night in the city of Dresden where tens of thousands of people turned out to demonstrate against what they call the ‘Islamization’ of the West. Germany has offered asylum to more Syrian refugees than any other country, and this appears to have set off the protests. Henry Ridgwell reports from London.
Video

Video Aceh Rebuilt Decade After Tsunami, But Scars Remain

On December 26, 2004 there was an earthquake in the Indian Ocean so powerful it caused the Earth’s axis to wobble a few centimeters. Onshore on the island of Sumatra, the resulting tsunami was devastating. A decade later, VOA Correspondent Steve Herman reports from Banda Aceh, Indonesia, where although there is little remaining evidence of the physical devastation, the psychological scars among survivors remain.
Video

Video Refugees Living in Kenya Long for Peace in the Home Countries

Kenya is host to numerous refugees seeking safe haven from conflict. Immigrants from Somalia face challenges in their new lives in Kenya. Ahead of International Migrants Day (December 18) Lenny Ruvaga has more for VOA News from the Kenyan capital.
Video

Video Turkey's Authoritarianism Dismays Western Allies

The Turkish government has been defiant in the face of criticism at home and abroad for its raids targeting opposition media. The European Union on Monday expressed dismay after President Recep Tayyip Erdogan lashed out at Brussels for criticizing his government's action. Turkey's bid to be considered for EU membership has been on hold while critics accuse the NATO ally of increasingly authoritarian rule. Zlatica Hoke reports.
Video

Video US-China Year in Review: Hong Kong to Climate Change

The United States is pushing for a code of conduct to resolve territorial disputes in the South China Sea as it works to improve commercial ties with Beijing. VOA State Department correspondent Scott Stearns reports on a year of U.S. policy toward China from Hong Kong to climate change.
Video

Video Japanese Leader’s Election Win Raises Potential for Conflict with Neighbors

Japan’s Prime Minister Shinzo Abe and his allies easily won a two-thirds majority in parliament Sunday, even though the country has slipped into recession under his conservative policies. VOA’s Brian Padden reports from Seoul, that the prime minister’s victory will empower him to continue economic reforms but also pursue a nationalist agenda that will likely increase tensions with Japan’s neighbors.
Video

Video Nuba Mountain Families Hide in Caves to Escape Aerial Bombings

Despite ongoing peace talks between Sudan's government and the rebel Sudan People’s Liberation Movement-North, or SPLM-N, daily aerial attacks continue in South Kordofan province’s Nuba Mountains. Adam Bailes was there and reports for VOA that government forces are targeting civilian areas, rather than military positions, with their daily bombardments.

All About America

AppleAndroid

World Currencies

EUR
USD
0.8033
JPY
USD
117.19
GBP
USD
0.6372
CAD
USD
1.1634
INR
USD
63.622

Rates may not be current.