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

Video Anti-Muslim Sponsor of Texas Cartoon Contest Draws Ire

Pamela Geller's supporters say she speaks truth about sensitive topic, while critics say she preaches 'that Islam is inherently evil' More

East Meets West in Exhibition Showing Chinese Influence on Fashion

Metropolitan Museum of Art exhibition juxtaposes influence of art, imagery and culture, from Imperial China to the present day, on Western fashion and design More

South Africa Begins New Love Affair With Vinyl Records

Enthusiasts say the 'rebirth' of vinyl is resulting in a rebirth of music in South Africa More

Featured Videos

Your JavaScript is turned off or you have an old version of Adobe's Flash Player. Get the latest Flash player.
Mass Grave Exposes Entrenched Trafficking in Thailandi
X
May 05, 2015 5:50 PM
Police in southern Thailand have found two more camps believed to have held human trafficking victims -- one containing a buried skeleton. This comes just days after officials announced arrests in connection with the grisly discovery of 26 bodies in a mass grave at another location. Officials suspect as many as 400 mostly ethnic Rohingya from Myanmar were being held for ransom at the remote camp near the Malaysian border. Steve Sandford reports on developments in the case.
Video

Video Mass Grave Exposes Entrenched Trafficking in Thailand

Police in southern Thailand have found two more camps believed to have held human trafficking victims -- one containing a buried skeleton. This comes just days after officials announced arrests in connection with the grisly discovery of 26 bodies in a mass grave at another location. Officials suspect as many as 400 mostly ethnic Rohingya from Myanmar were being held for ransom at the remote camp near the Malaysian border. Steve Sandford reports on developments in the case.
Video

Video Russia's 'Victory Day' Glory Over Nazis Overshadowed by Ukraine

ussia is preparing to commemorate the 70th anniversary of the end of World War II, known since the Soviet era as “The Great Patriotic War,” with a massive parade on May 9th of military hardware and millions of medals handed out to veterans or their relatives. But critics say the Soviet-style display of power and nationalism overshadows tragic scars during and after the war that still influence politics and foreign policy, especially in the current Ukraine crisis.
Video

Video WWII Anniversary Brings Old Friends and New Worries

The 70th anniversary of the end of World War II has special significance, with Russia becoming more assertive in Ukraine and sending its military planes to the edges of western countries’ airspace. Changes in the geostrategic balance and the transatlantic relationship are felt across the continent, not least in German towns that have hosted U.S. military bases since the defeat of Nazi Germany. VOA’s Al Pessin visited Schweinfurt, Germany, where a large base closed last year.
Video

Video Abraham Lincoln Funeral Re-created for 150th Civil War Anniversary

Over the last four years, commemorative events to mark the 150th anniversary of the U.S. Civil War have brought thousands of visitors to battlefields and historic landmarks across the country. As VOA's Kane Farabaugh reports from the Midwest state of Illinois, the final event in the Civil War's sesquicentennial honors the final journey home of the slain American President, Abraham Lincoln.
Video

Video Campaign Raises Money to 'Uncuff' Journalists

Beginning Sunday – World Press Freedom Day – the Committee to Protect Journalists, a private U.S. group, is launching a campaign to bring attention to their plight and encourage efforts to free them. Deborah Block reports.
Video

Video Volunteers Pull Together to Aid Baltimore Riot Victims

Calm has returned to Baltimore, Maryland, after authorities lifted an overnight curfew imposed almost a week ago to stem the rioting that followed the funeral of Freddie Gray - the 25-year-old black man who died of spinal injuries suffered while in police custody. Six police officers, three of them African-American, have been charged in connection with his death. Baltimore is now trying to get back to normal, in part with the help of volunteers who responded to calls to help those in the city'
Video

Video From Aleppo To Berlin: Band of Brothers Escapes Civil War

Hundreds of thousands of Syrians have fled the civil war in their country and journeyed to Europe by boat across the Mediterranean. It is a terrifying ordeal with dangers at every turn. A group of Syrian brothers and their friends describe their ordeal as they try to reach Germany. VOA's Henry Ridgwell reports. ...
Video

Video Rural Nepal Suffers Brunt of Quake’s Devastation

Nepal is still coming to grips with the full extent of the devastation and misery caused by last Saturday’s magnitude 7.8 earthquake. Some of the hardest-hit communities have been cut off by landslides making it difficult to assess the precise toll. A VOA News crew has been among the first to reach a few of the smaller, remote communities. Correspondent Steve Herman reports from the Sindhupolchak district, east of Kathmandu, which suffered greatly in Nepal’s worst quake in more than 80 years.
Video

Video Obama Praises Work of 3 Immigrant Journalists

President Barack Obama met with three immigrant journalists at the White House Friday to praise them for their work ahead of World Press Freedom Day, May 3. In attendance: Dieu Cay (his pen name) a blogger from Vietnam recently released from prison; Lily Mengesha from Ethiopia who was harassed and detained for exposing the marrying off of young girls as child brides, and Fatima Tlisova, an ethnic Circassian from the North Caucasus region of Russia, who works for VOA's Russian Service.
Video

Video Middle East Atheist Channel Defies Taboo

In Egypt, a deeply religious country in a deeply religious region, atheism is not only taboo, it is dangerous. It is sometimes even criminal to publicly declare nonbelief. Despite the danger, one group of activists is pushing back with a new online channel that defends the right not to believe. VOA’s Heather Murdock reports.
Video

Video Nepal Quake Survivors Tell Their Stories

Against all hope, rescuers have found a few more survivors of the devastating earthquake that hit Nepal last Saturday. Mountain climbers and hikers trapped in remote places also have been airlifted to safety, and aid is finally reaching people in the areas closest to the quake's epicenter. Survivors and rescuers are now recounting their experience. Zlatica Hoke has this story.
Video

Video Lessons for Germany, Europe Remain on Anniversary of WWII's End

The 70th anniversary of the end of World War II will be marked May 8-9 in all European countries except Germany, which lost the war. How is the war viewed there, and what impact is it still having? From Berlin, VOA’s Al Pessin reports.
Video

Video Nepal Town Destroyed By Quake Counts Itself Lucky

Foreign search teams on Wednesday began reaching some of the communities outside Kathmandu that suffered worse damage than Nepal’s capital from last Saturday’s massive earthquake. VOA Correspondent Steve Herman is in Sankhu - a town of about 10,000 people - where there is relief the death toll is not higher despite widespread destruction.
Video

Video Somali Hotel Chain Owner Strives to Make a Difference

Many in the Somali diaspora are returning home to make a new life despite the continuing risks. Since 2011 when a military campaign against Al-Shabab militants began making progress, members of the diaspora community have come back to open hospitals, schools, hotels, restaurants and other businesses. Abdulaziz Billow in Mogadishu profiles the owner of a chain of hotels and restaurants who is helping to bring change to the once-deadly Somali capital.
Video

Video Child Migrants Cross Mediterranean Alone, Face Unknown Future

Among the thousands of migrants making the deadly journey by boat to Europe, there are unaccompanied girls and boys. Some have been sent by relatives to earn money; others are orphaned or fleeing war. From a shelter for young migrants in the Sicilian town of Caltagirone, VOA's Henry Ridgwell reports.

Poll: Baltimore Police Charged

Poll archive

VOA Blogs

World Currencies

EUR
USD
0.8967
JPY
USD
120.22
GBP
USD
0.6616
CAD
USD
1.2116
INR
USD
63.662

Rates may not be current.