The travails of Swiss banks and bankers as they try to respond to the ongoing U.S. crackdown on Americans’ offshore accounts remain an unavoidable topic in this blog.
Last week, in our October 15 post, we discussed the trial of one such banker. As we noted, the former head of the UBS division that handled foreign accounts for American clients has been facing criminal tax evasion charges in the U.S.
Swiss banks themselves have been facing their own full-court press from the IRS in recent years. But despite notable prosecutions against UBS and others, Swiss banks have by no means lost interest in the American market. We discussed this in our August 20 post.
In today’s post, we will discuss another aspect of Swiss banks’ complicated relationships with U.S. clients and tax authorities. More specifically, we will take note of the recent statement by a high-ranking Swiss government official on the issue of Swiss banks and U.S. tax evasion investigations.
The official was Eveline Widmer-Schlumpf, the top official in the Swiss finance department. The letter was initially private, addressed to the Swiss bank SB Saanen Bank AG. But its contents eventually became public and the Wall Street Journal reported on them this week.
SB Saanen and other Swiss banks have been uncertain about how to respond to U.S. program offering nonprosecution agreements (NPA) for banks that may have helped U.S. taxpayers hide offshore accounts from the IRS. In order to qualify for an NPA, U.S. authorities expect the banks to give up sensitive data on their U.S. clients in exchange.
Obviously that is a difficult decision for Swiss banks to make. But in the letter that the Journal reported on this week, the word to the banks from a high-ranking Swiss government official was clear: they are on their own.
In other words, they should not expect guidance from the Swiss government on whether to seek a nonprosecution agreement with U.S. authorities. The banks should also not expect guidance from their government in deciding how much information about U.S. account holders to disclose in order to obtain such an agreement.
In other words, the Swiss government seems willing to leave its own banks out on an offshore limb.
Source: Wall Street Journal, “Swiss Banks on Own in Navigating U.S. Offshore-Account Requirements,” John Leitzing, Oct. 21, 2014