Saturday 20 April 2019

Switzerland close to deal in US tax dispute

Zurich, May 19, 2013

Switzerland is on the brink of a deal to settle a long-running dispute with US authorities over Swiss banks accused of helping wealthy Americans evade billions of dollars of tax, the finance minister said.

"We hope that we will shortly be at the finishing line," Eveline Widmer-Schlumpf told Swiss radio in an interview. "The banks won't get it for nothing."

Widmer-Schlumpf declined to say how high fines might be, but added: "It is clear that it will not be a pleasant solution."

Bank secrecy, which has helped Switzerland become the world's largest offshore centre with $2 trillion in assets, has come under fire since the financial crisis, as cash-strapped governments seek to clamp down on tax evasion.

The Swiss government has been in protracted talks to end US investigations into Swiss banks, including Credit Suisse and Julius Baer, in return for expected heavy fines and a transfer of client names.

Bern said last month it was considering a possible solution to the US probes, but declined to give further details as negotiations were still continuing.

A source familiar with the talks has told Reuters the two sides had agreed an outline for a deal that would divide more than 300 Swiss banks according to the extent they had helped US clients hide money, to determine how they are dealt with.

Under the outline deal, banks already under investigation would settle with individual deferred prosecution agreements, the source said. Credit Suisse has already made a 295 million Swiss franc ($303 million) provision towards a settlement.

A second group of banks which had US clients but have not yet been targeted by investigators would have to agree to pay fines and hand over data on their customers, the source said.

The country's biggest bank UBS was forced in 2009 to pay a fine of $780 million and hand over the names of more than 4,000 clients, delivering the US authorities information that allowed them to then pursue other Swiss banks.

Switzerland's oldest private bank, Wegelin & Co, said in January it was closing down after pleading guilty to helping Americans evade taxes, paying a fine of nearly $58 million.

EU finance ministers gave their official approval this week to start formal negotiations with Switzerland and the tax-haven microstates of Liechtenstein, San Marino, Andorra and Monaco about surrendering bank data on an automatic basis, exposing savers to tax claims.

Widmer-Schlumpf said Switzerland could do little to resist the pressure for more transparency. "The automatic exchange of information can't be stopped," she said. – Reuters

Tags: Switzerland | zurich | Swiss banks | Americans |


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