The privacy of Swiss bank accounts was once inviolable. Today, however, those historic bank secrecy protections are in a state of flux. As we discussed in our Mary 31 post, the Swiss government has decided to permit Swiss banks to provide American tax authorities with aggregate statistical data about U.S. taxpayers.
Now, the Swiss government has taken this a step further and offered a program involving data sharing by about a dozen Swiss banks. These are not just any banks. They are banks that are already under investigation by the U.S. Justice Department for facilitating tax evasion by U.S. taxpayers.
The Swiss action is important because it affects taxpayers in Southern California and across the country who must make decisions about offshore account compliance.
The aggregate account data, in form of “leaver lists,” is not so abstract that it lacks all individual identifiers. The very reason why U.S. authorities want it is to identify individuals suspected of tax evasion.
It is not only U.S. individuals who have something at stake, either. The Swiss program permits banks to provide information to American authorities about employees who have provided assistance to U.S. taxpayers.
Size or historic stature has already been shown to be no shield against potential American prosecution for Swiss banks. In January of this year, the oldest Swiss bank, Wegelin & Co., pleaded guilty to tax evasion. Wegelin was subsequently sentenced to pay a $58 million fine and ended up becoming defunct.
The Swiss banking giant UBS has also found itself up against the U.S. Department of Justice (DOJ). UBS struck a deal with DOJ that resulted in a whopping $780 million fine. American prosecutors also gained access to a wealth of data about U.S. taxpayers with accounts in Swiss financial institutions.
In short, Swiss bank secrecy is by no means dead. But it has entered a new, uncertain era.
Source: Wall Street Journal, “Swiss Banks Near Deal on U.S. Tax Cheats,” John Letzing, July 11, 2013