BNP Paribas (Suisse) SA (BNPP), KBL (Switzerland) Ltd. (KBL Switzerland) and Bank CIC, 3 Category 2 banks have reached a solution under the US Tax Program signed in August 2013. The banks have each signed a Non-Prosecution Agreement and will globally pay $81m in penalties.
According to the US Department of Justice (DoJ), ‘BNPP opened and maintained accounts for US taxpayers in the name of non-U.S. corporations, foundations, trusts or other legal entities, in which US taxpayers concealed their beneficial ownership of the accounts. BNPP readily accepted accounts in which external trust companies created and administered offshore structures incorporated or based in offshore locations such as the British Virgin Islands, Panama, Liechtenstein and Liberia, for certain of BNPP’s US clients’.
According to the DoJ, BNPP cooperated with the government and ‘described in detail the structure of its US cross-border business, including but not limited to the policies BNPP put in place to comply with US law, a summary of the top 20 US-related accounts by assets under management value, a redacted summary of external asset managers and relationship managers with US-related accounts by assets under management and substantial information about US-related accounts associated with external asset managers and relationship managers. BNPP provided a list of the names and functions of all individuals who structured, operated or supervised the cross-border business at BNPP and also provided relevant information concerning its relationship managers.
The BNPP’s NPA shows that since August, 2008, BNPP held and managed approximately 760 US-related accounts with a peak value of approximately $1.2bn in assets under management. BNPP will pay a penalty of $59.783m.
KBL Switzerland described in detail the structure of its cross-border business for US-related accounts.
KBL Switzerland moved or restructured the assets of US-related accounts in ways that concealed the US nature of those accounts. According to the DoJ, ‘in late 2009 and early 2010, KBL Switzerland followed the instructions of two external asset managers, concerning four separate US-related accounts that were directly held by US taxpayer clients of KBL Switzerland, to restructure the assets of the accounts into new insurance-policy accounts. These insurance wrapper accounts were titled in the name of a Liechtenstein insurance company’. KBL Switzerland also permitted US client to close their account through cash withdrawals; in one instance a single cash withdrawal of nearly $2m was made. The bank provided Swiss travel cash cards issued by third parties.
The KBL’s NPA tells us that since August, 2008, the bank maintained 277 US-related accounts having a maximum aggregate dollar value of over $255m. KBL Switzerland will pay a penalty of $18.792m.
Bank CIC is a subsidiary of the French financial group Crédit Mutuel-CIC, one of the largest banking groups in France.
Bank CIC offered a variety of traditional Swiss banking services, including hold mail and numbered accounts, that it knew or should have known could assist, and did in fact assist, US clients in hiding assets and income from the Internal Revenue Service.
In CIC Bank’s NPA we learn that since August, 2008, the institution held 261 US-related accounts, comprising approximately $228m in assets under management. Bank CIC will pay a penalty of $3.281m.