The Swiss banks have until December 31, 2014 (extended deadline) to announce their wish to join the Category 3 in the US Program. The Category 3 banks are the banks that believe they have not engaged in activities that could have breached US law. An Independent Examiner (e.g. US or Swiss law firm or accountant) will need to verify this and there will be a confirmation that effective compliance programs are in place. Those banks will seek a Non-Target Letters (NTL), will not pay a penalty but the handling costs endured by fulfilling the requirements of the US Program is born by them.
The Agefi stresses the fact that Category 3 is a risky choice, which was raised when the US Program was issued. Those banks risk to be re-categorized to Category 1 and prosecuted if it is found that some undeclared US clients are in the banks’ book. In order to spot those clients the US Department of Justice (DoJ) will have a list from the Category 2 banks with the in- and outflows, showing where client’s assets move and what the destination banks are. Banks sending this kind of information to the DoJ will need to inform upfront with a 20 days deadline the respective banks appearing on their lists of transactions. This is another important element prior to choosing for Category 3.