The Swiss banks have hired auditors, lawyers and dedicated part of their workforce to determine whether they should take part in the US Program for Non-Prosecution Agreements or Non-Target letters in the intention to settle a tax dispute between Swiss Banks and the United States of America linked to tax evasion of US Related Accounts held in Swiss Banks.
“It’s necessary for the banks to do a deep analysis of their clients and the history of those relationships,” said SBA spokeswoman Sindy Schmiegel to Bloomberg. “That’s really expensive, and that’s why the program is at the limit of tolerability for the banks.”
The US Program defines 4 categories
Category 1 banks are the institutions that were already under investigation by the DoJ at the time of the publication of the US Program on August 29, 2013. They are excluded from the Program.
Individual delivery of U.S. requested information. This includes information about in- and outflows of funds from and to other banks without giving client names (leaver lists). They need to find a solution based on direct negotiations with the Department of Justice (DoJ).
Fines are defined on an individual basis.
They generally enter into a Deferred Prosecution Agreement (DPA).
Category 2 banks are not already under investigation by the Department of Justice (DoJ) and have reason to believe that they have committed tax-related offenses.
The banks need to deliver information about the cross-border business for U.S. Related Accounts (USRA) as well as names and functions of individuals who structured, operated and supervised this business. Among other information the banks also need to hand-over information about the transfer of funds into and out of USRA accounts closed during the applicable period. The transmission to the DoJ of names and functions of relationship managers as well as other third parties associated with these accounts are another requirement by the Program.
The fine is based on a lump sum calculation for undeclared U.S. Related Accounts with different fixed fine rates of the maximum aggregate dollar value of such accounts.
- existing accounts on August 1, 2008
- accounts opened between August 1, 2008 and February 28, 2009
- new accounts opened after February 28, 2009
These banks will seek Non-Prosecution Agreements (NPA).
Category 3 banks are those that believe they have not engaged in activities that could have breached U.S. law. An Independent Examiner (e.g. U.S. or Swiss law firm or accountant) will need to verify this.
Information about the total managed U.S. assets need to be provided by these banks as well as a confirmation that effective compliance programs are in place.
They do not need to pay a penalty but the handling costs endured by fullfilling the requirements of the Program is born by these banks.
They will be able to seek Non-Target Letters (NTL).
Category 4 is reserved for banks with a local client base according to the definition of FATCA.
The certification of the FATCA status is required by the US Program.
No fine needs to be paid.
These banks will be able to seek Non-Target Letters (NTL).
It is believed that most banks will enter Category 2 of the US Program.
The article goes on mentioning a number of banks such as
Banque Cantonale de Geneve
Bank Coop AG
Barclays Bank (Suisse) SA
Credit Suisse Group AG
Deutsche Bank (Schweiz) AG
Edmond de Rothschild Group
EFG International AG
HSBC Holdings Plc
J. Safra Sarasin Holding Ltd
Julius Baer Group Ltd
La Roche & Co
Lombard Odier & Cie
Migros Bank AG
Union Bancaire Privee
Valiant Holding AG