The US Department of Justice announced further agreements with Category 2 banks in the US Tax Program. Banque Internationale à Luxembourg (Suisse) SA (BIL Switzerland), wholly owned by Banque Internationale à Luxembourg, and Zuger Kantonalbank (ZGKB) have each signed a Non-Prosecution Agreement (NPA), will pay a penalty, and continue to cooperate with the DoJ.
According to the DoJ ‘BIL Switzerland opened, maintained, serviced and profited from accounts that were held or beneficially owned by US taxpayer clients. BIL Switzerland opened several accounts for US taxpayers who were leaving other Swiss banks that were being investigated by the department, including UBS and Credit Suisse’. Moreover ‘In the period since August, 2008, BIL Switzerland maintained at least 145 accounts, comprising an aggregate value of more than $64 million, that were owned by insurance companies and which held assets relating to insurance products that were issued to US taxpayer clients of the respective insurance companies. Such accounts, known commonly as insurance-wrappers, were titled in the names of insurance companies, but were funded with assets that were transferred to the accounts for the beneficial owners of the insurance products (the policy holders). The assets in these accounts, while titled in the names of insurance companies, were managed by external asset managers for the ultimate benefit of the policy holders, through powers of investment that were given by the insurance companies to the external asset managers’.
BIL Switzerland’s NPA tells us that overall, since August, 2008, the institution maintained 267 US-related accounts with a maximum aggregate dollar value in excess of $182m. BIL Switzerland will pay a penalty of $9.71m.
As far as the ZGKB is concerned, the DoJ says that ‘From at least 2001 to 2012, ZGKB opened and maintained accounts for certain of its US clients while aware of the risk that such clients were not declaring income earned in these accounts or the existence of such accounts’.
The ZGKB’s NPA tells us that since August, 2008, the bank maintained and serviced 434 US-related accounts with a maximum aggregate dollar value of $220m. ZGKB will pay a penalty of $3.798m.