The participation of Swiss banks in the US Program to settle the tax dispute with the USA is very costly. High costs are involved in hiring and flying in the US Independent Examiners, external advisers, and setting up internal team. According to the Tages Anzeiger no one wants to call a number, but a number of banks declared that the legal fees will eat up half of a normal annual profit. In addition to the legal fees the Category 2 banks have to count with fines as well.
The newspaper also raises that the provision made by banks were first thought to be used at 75% for fines and 25% for lawyers and support, while now the reverse ratio is more likely.
The evidence of innocence under American law will cost millions to Category 3 banks – banks that believe they have not engaged in activities that could have breached US law. An Independent Examiner needs to verify this; those banks do not need to pay a penalty but the handling costs endured by fulfilling the requirements of the US Program is born by the banks.
The Raiffeisen Group, for example, opted for Category 3. Its CEO Pierin Vincenz is said to have predicted at an internal event a cost of CHF 20 to 25m. Such amount should reflect not only the pure legal fees, but also the internal effort. The media office in St. Gallen will not confirm that number “We currently expect around 10 million Swiss francs,” explains Franz Würth the spokesman of the bank.