The US Justice Department (DoJ) announces that it has reached an agreement under the US Tax Program with two more Category 2 Swiss Banks, namely Migros Bank AG and Graubündner Kantonalbank. The banks signed a Non-Prosecution Agreement (NPA) and will pay a penalty.
In the Migros Bank’s NPA we learn that in December 2008, the bank’s executive board established a working group to study the situation of US-domiciled clients. The working group considered stopping business with US-related clients to be a low priority ‘because that business generated earnings with hardly any additional expenditure and had ‘further potential as various banks are discontinuing the provision of advisory services”. Moreover, the working group considered the creation of a desk dedicated to US clients a top priority.
Between May and December 2009, Migros Bank accepted 37 new US-related accounts. Of these, 17 were funded by transfers from banks already under investigation by the DoJ, the so-called Category 1 banks.
Globally since August, 2008, Migros Bank provided banking services to 898 US-related accounts, with a maximum asset value over $273m. The bank will pay a penalty of $15.037m.
In the Graubündner Kantonalbank’s NPA we learn that the bank has fully cooperated with the DoJ as part of its participation in the US Tax Program. ‘Further evidencing Graubündner Kantonal Bank’s cooperation is the fact that its employees and members of the board of directors have not objected to the disclosure of their names and functions at <the bank> to the department. In compliance with Swiss privacy laws, Graubündner Kantonal Bank has sought and obtained bank secrecy waivers from many of its US customers, whose names were then provided to the US government’.
Since August, 2008, Graubündner Kantonal Bank had 364 US-related accounts with an aggregate maximum balance of c.a. $105.5m. The bank will pay a penalty of $3.616m.
Acting Assistant Attorney General Caroline D. Ciraolo of the DoJ’s Tax Division adds that ‘with each agreement reached under the Swiss Bank Program, and each US accountholder who initiates and completes a voluntary disclosure to the Internal Revenue Service, we move a step closer to eliminating secret undisclosed accounts’.
Full statistics on banks having reached an agreement here