The US Department of Justice (DoJ) announced that Edmond de Rothschild (Suisse) SA and Edmond de Rothschild (Lugano) SA (collectively EdR Switzerland) reached a joint resolution under the US Tax Program The Program was signed in August 2013 to help the Swiss banks in finding a solution the tax dispute with the US and avoid potential cr, its subsidiary, iminal liabilities in the US. EdR Switzerland will pay a penalty of more than $45 million.
The DoJ lists a number of means used by EdR Switzerland to open and maintain US-related undeclared accounts long before 2013. Here are some of them:
- Providing traditional Swiss banking products such as hold mail, code name and numbered account services;
- Assisting clients in using sham entities, such as structures as nominee beneficial owners of the undeclared accounts and insurance wrappers;
- Providing offshore credit cards, cash cards and debit cards to repatriate funds from the undeclared accounts;
- Accepting and suggesting the use of Internal Revenue Service (IRS) forms that falsely stated under penalties of perjury that the sham entities beneficially owned the assets in the undeclared accounts; and
- Divesting US securities from its undeclared US accounts for the purpose of subverting its Qualified Intermediary (QI) Agreement with the IRS.Relationship managers played a major role in all this activities.
The DoJ also stresses that EdR Switzerland has made comprehensive disclosures regarding its US-related accounts, including providing valuable information that could be used to make treaty requests to the Swiss competent authority for US client account records. EdR Switzerland also described in detail its US cross-border business, the supervisory chain overseeing relationship managers, and the names of senior management as well as legal and compliance officials.
The EdR Switzerland’s NPA informs us that since August, 2008, the bank held and managed approximately 950 US-related accounts, which included both declared and undeclared accounts, with aggregate peak value of $2.16bn. EdR Switzerland will pay a penalty of $45.245m.