The head of Switzerland’s banking regulatory body has issued a last-minute plea for Swiss banks to participate in a United States programme to reveal undeclared assets from American clients. But a prominent lawyer says many may not sign up.
In the Friday edition of the prestigious Neue Zürcher Zeitung newspaper, Patrick Raaflaub, director of the Swiss Financial Market Supervisory Authority (FINMA), said if a bank had any doubt it had run afoul of US law, it should sign up to the scheme and tell FINMA before December 9. Banks have until the end of 2013 to inform the US authorities.
Raaflaub admitted cooperation would be expensive for participating institutions – with fines up to 50% of the value of assets involved – and that the deal offered no 100% assurances that they would face no future lawsuits.
Any bank failing to cooperate «must expect to be involved in a conflict dragged out over years», he warned, «and the fear of further sanctions from the US authorities.»
But there is a possibility that several banks may refuse the deal.
«The situation is very worrying and many banks are now seriously considering the possibility of not participating in the programme,» Geneva-based lawyer Shelby du Pasquier told the French-speaking Le Temps newspaper on Friday.
The Swiss government, with the backing of the financial sector, signed an agreement with the US on September 3 which aims to end a long-standing dispute over tax dodging.
Categories
On paper the deal separates banks into different categories. Fourteen banks are in category one and therefore excluded from the programme as they continue to be under criminal investigation. Among them are UBS, Credit Suisse, at least two state-backed cantonal banks as well as private banks Julius Baer, Pictet and the Swiss arm of Britain’s HSBC.
The remaining 300 banks are divided into three other categories. Category two includes Swiss banks not currently under investigation that will provide accountholder information, pay fines, or both, in exchange for deferred prosecution or non-prosecution agreements from the US. Category three are Swiss banks that can prove that they did not aid US taxpayers in tax evasion and category four are local Swiss banks not subject to the American Foreign Account Tax Compliance Act (FATCA).
The institutions have until the end of this year to apply to the programme, then reveal the size of assets involved and the date that accounts were opened.
For accounts already in existence by August 1, 2008, banks would pay a fine equivalent to 20% of the assets held in that account.
Accounts opened between August 1, 2008, and February 28, 2009, would attract a 30% levy. A fine of 50% would apply to accounts opened after February 28, 2009.