By Caroline D. Ciraolo
Financier Worldwide
November 2013
THE UNITED STATES STRIKES AGAIN – THE NEW SWISS BANK PROGRAM
The United States has taken another giant leap forward in its aggressive pursuit of individuals and entities who attempt to evade, or help others evade, US tax reporting and payment obligations through the use of foreign accounts, structures, and financial arrangements. On 29 August 2013, the US Department of Justice (DoJ) and the Swiss Federal Department of Finance issued a joint statement announcing a program under which Swiss banks that are not under criminal investigation, and have reason to believe they may have committed tax-related offences under Title 18 or 26 of the United States Code, or monetary offences under 31 U.S.C. §§ 5314 and 5322 in connection with undeclared ‘U.S. Related Accounts’ during the ‘Applicable Period’, as those terms are defined by the program, may request a Non-Prosecution Agreement (NPA). These banks are referred to as ‘Category 2’ banks and under the terms of the program, are required to: (i) pay substantial penalties; (ii) make a complete disclosure of their cross-border activities; (iii) provide detailed information on an account-by-account basis for accounts in which US taxpayers have a direct or indirect interest; (iv) cooperate in treaty requests for account information; (v) provide detailed information as to other banks that transferred funds into secret accounts or that accepted funds when secret accounts were closed; and (vi) agree to close accounts of account holders who fail to come into compliance with US reporting obligations.
