Stéphane Bussard, journalist at Le Temps, interviews Scott Michel, Chairman of the law firm Caplin & Drysdale in Washington.
Many Swiss banks continue to deal with the US Department of Justice (DoJ) to put an end to their tax-related problems. Scott Michel puts into perspective the likely evolution of this sensitive issue and the US Program. According to him within the next 6 to 12 months the remaining Category 1 banks will solve the issue with the DoJ along the lines of UBS and Credit Suisse, i.e. pay a fine and cooperate. The Credit Suisse marked a turning point. The DoJ has found a way to charge a bank, to force it to plead guilty without jeopardizing its financial health, or risk of adverse impact on the financial markets.
For the Category 2 banks “I would not be surprised to hear in October or November the announcement of two or three Non-Prosecution Agreements” adds Scott Michel.
The strategy of the DoJ is to follow the flows of funds. Hence, once the data transmitted by Switzerland have been analyzed, the DoJ will probably turn to Singapore, the Caribbean, Hong-Kong. Scott Michel thinks that the DoJ is also interested in Eastern Europe, Latin America and the Middle East.
The article concludes by addressing the FATCA regulations. Scott Michel qualifies them as “an extremely intrusive, complicated and extraterritorial regulation. Banks and institutions worldwide that are submitted must spend considerable sums to comply”.