Julius Baer CEO Expects Swiss-U.S Tax Dispute Agreement

Julius Baer Group Ltd. (BAER) Chief Executive Officer Boris Collardi expects talks between the U.S. and Switzerland to produce an agreement that will allow Swiss banks to resolve a tax-evasion dispute.

“I think we’re getting into the final chapter of discussions between the two governments,” the CEO of Switzerland’s third-largest wealth manager said at an investor presentation in Zurich today. “That should result in some kind of framework agreement.”

Julius Baer and others among the at least 12 Swiss banks being probed by the Department of Justice on suspicion of helping Americans dodge taxes were authorized by the Swiss government to cooperate with the U.S. in April 2012. Switzerland and the U.S. are discussing a plan for other banks that may not be under investigation to resolve disputes.

Officials from the two countries held talks on July 10 in Washington and will publish a joint statement once they agree on the conditions under which banks can seek resolutions, Mario Tuor, a spokesman for Switzerland’s State Secretariat for Financial Matters in Bern, said today by phone.

“We’re doing what we can,” he said. “We want a solution as quickly as possible.”

The U.S. wants the Swiss government to guarantee that banks fully comply with the settlement program agreed between the two countries, NZZ reported on July 3. The U.S. wants to include a provision whereby it would terminate the program if a Swiss court stopped a bank handing over data, the newspaper said.

More Advanced

The Swiss government is giving authorization to other banks, enabling them to bypass laws on assisting foreign criminal inquiries as the U.S. widens its probe.

Julius Baer is “more advanced” than other Swiss banks in nearing a settlement and the firm has handed over client information for the Swiss tax authority to pass on to the U.S., Collardi said today. Julius Baer expects to pay an “affordable” fine to settle the probe this year, he said.

Wegelin & Co., established in 1741, agreed to pay $74 million in fines and closed its doors to clients after it became the first Swiss lender to face criminal charges in the U.S. crackdown. The bank pleaded guilty in Manhattan in January to conspiring to help hide more than $1.2 billion in assets from the Internal Revenue Service while opening undeclared accounts for at least 70 U.S. taxpayers who were former clients of UBS AG, Switzerland’s largest bank.

UBS avoided criminal prosecution in February 2009 by paying $780 million, admitting it fostered tax evasion and giving the IRS data on more than 250 accounts to avoid prosecution. It later turned over data on another 4,450 accounts and in October 2010 the U.S. dropped its criminal case against UBS.

To contact the reporter on this story: Giles Broom in Geneva at gbroom@bloomberg.net

To contact the editor responsible for this story: Frank Connelly at fconnelly@bloomberg.net

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