The US Department of Justice (DoJ) announced that Banque Cantonale Vaudoise (BCV) reached a solution under the US Tax Program. The bank signed a Non-Prosecution Agreement (NPA)and will pay a penalty of $41.677m.
BCV provides private banking services to clients residing outside of Switzerland through its International Private Banking Department.
According to the DoJ, the BCV was aware that US persons had a legal duty to report to the Internal Revenue Service (IRS) and pay taxes and BCV knew or had reason to know that it was likely that some US taxpayers maintained undeclared accounts at the Bank.
In 2008, BCV opened approximately 10,000 more new client accounts bank-wide than in the previous years. A large portion of these accounts were for ex-UBS clients. Between August 2008 and February 2009, BCV opened 265 new US-related accounts, comprising an aggregate of $171m in new assets under management, without determining whether the relevant US taxpayer clients were tax compliant in the US.
During that period BCV also had several relationships with independent asset managers who brought 93 US-related clients. BCV offered a variety of traditional Swiss banking services – including hold mail service, numbered accounts and code named accounts, wealth structuring, etc.
In the BCV’s NPA we learn that since August, 2008, the bank held approximately 2,088 US-related accounts, which included both undeclared and not undeclared accounts, with total assets of approximately $1.3bn. The bank will pay a penalty of $41.677m.