The US appears to have struck a deal to force Swiss banks to hand over information about American clients, the value of their accounts and details of any assistance they have received from tax professionals…
Under the reported deal, US authorities can penalise Swiss banks who assisted US customers to evade tax, and prosecute their customers.
Investigations will concentrate on a six-year period, starting from 2008 and analysts predict penalties could reach $1bn.
Under the new rules, it will be possible for Swiss banks to turn US customer data over without breaching its decades-old bank secrecy laws.
The US hopes citizens who have used Swiss banks to evade tax will now come forward of their own free will, as thousands have done already under a voluntary program, to avoid a criminal prosecution. This tact has already brought in over $5bn from around 38,000 US nationals who feared being hauled up in court as tax evaders.
Swiss banks have been a target for authorities in the US since it launched a tax evasion crackdown in 2009, after UBS admitted it assisted American citizens to sidestep domestic taxation. The bank agreed to pay a $780m fine and handed over details of around 4,450 accounts.
Since then, over 120 taxpayers and financial advisers have been criminally charged by the US in connection with undeclared offshore accounts.
One-time Swiss bank customers who have subsequently moved their accounts elsewhere may not escape detection either, because under the new agreement the US can access retrospective Swiss bank data and uncover their tracks.
Switzerland – the world’s largest offshore wealth centre – is thought to hold personal and company accounts totalling more than $2tn in overseas deposits.
Earlier this year, US demands for Swiss bank information saw the country’s parliament vote for an alternative plan for a sweeping settlement amid concerns its sovereignty was being violated. However, the new deal struck in August does not require parliamentary approval.
Further afield, the US Foreign Account Tax Compliance Act continues to actively look for other American assets hidden overseas, with a particular focus on banks in Singapore, Hong Kong, Israel and the Caribbean.
