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US, Swiss to cooperate on tax evasion by foreign bank accounts

Last Updated: Friday, August 30, 2013 - 09:27

Washington: In an effort to address the issue of tax evasion by foreign bank accounts, the United States and Switzerland have announced a new program under which the Swiss banks would provide detailed account information to the US.

The program jointly announced by the two countries will significantly enhance US'ongoing efforts to aggressively pursue those who attempt to evade the law by hiding their assets outside of the United States, US Attorney General Eric Holder said.

"In addition to strengthening our partnership with the Swiss government, the program's requirement that Swiss banks provide detailed account information will improve our ability to bring tax dollars back to the US treasury from across the globe," Holder said.

Under the program, which is available only to banks that are not currently under criminal investigation by the department for their offshore activities, participating Swiss banks will be required to agree to pay substantial penalties, make a complete disclosure of their cross-border activities and provide detailed information on an account-by-account basis for accounts in which US taxpayers have a direct or indirect interest.

The Swiss banks will also cooperate in treaty requests for account information, provide detailed information as to other banks that transferred funds into secret accounts or that accepted funds when secret accounts were closed and agree to close accounts of account holders who fail to come into compliance with US reporting obligations.

Banks meeting all of the above requirements will be eligible for non-prosecution agreements.

Banks currently under criminal investigation related to their Swiss banking activities, and all individuals, are expressly excluded from the program, the Justice Department said.

"This program will provide us with additional information to prosecute those who used secret offshore bank accounts and those here and abroad who established and facilitated the use of such accounts," said Deputy Attorney General James M Cole.

"Now is the time for all US taxpayers who hid behind Swiss bank secrecy laws or have undeclared offshore accounts in other foreign countries to come forward and resolve their outstanding tax issues with the United States," Cole said.

Since 2009, the Justice Department has charged more than 30 banking professionals and 68 US account holders with violations arising from their offshore banking activities.

Fifty-four US taxpayers and four bankers and financial advisers have plead guilty, and five taxpayers have been convicted at trial.

One Swiss bank entered into a deferred prosecution agreement and another Swiss bank was indicted and pleaded guilty.

Currently, the department is actively investigating the Swiss-based activities of 14 financial institutions.

The department's enforcement activities are global and have also included public actions concerning activities in India, Luxembourg, Israel and the Caribbean.


First Published: Friday, August 30, 2013 - 09:27
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