Switzerland Close to Resolving Undeclared U.S. Accounts

Photographer: Valentin Flauraud/Bloomberg

The Swiss government is due to decide today whether to accept the accord, paving the way for a resolution for all Swiss banks that would involve fines and disclosure of U.S. client data, Tages-Anzeiger reported. Close

The Swiss government is due to decide today whether to accept the accord, paving the... Read More

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Photographer: Valentin Flauraud/Bloomberg

The Swiss government is due to decide today whether to accept the accord, paving the way for a resolution for all Swiss banks that would involve fines and disclosure of U.S. client data, Tages-Anzeiger reported.

Switzerland is moving closer to an agreement with the U.S. to settle a dispute over banks including Credit Suisse Group AG (CSGN) and Julius Baer Group Ltd. (BAER) allegedly helping American clients avoid taxes.

The Swiss Bankers Association’s board of directors, which includes executives of the country’s largest lenders, met Aug. 26 to discuss a proposed program to resolve the issue, Sindy Schmiegel Werner, a spokeswoman for the Basel, Switzerland-based group, said by telephone today.

“The board stands behind the program even though it’s a painful measure to take,” she said, declining to elaborate.

The Swiss government is due to decide today whether to accept the accord, paving the way for a resolution for all Swiss banks that would involve fines and disclosure of U.S. client data, Tages-Anzeiger reported. Acceptance of the proposal would also help about a dozen wealth managers already under investigation in the U.S., including Credit Suisse and Julius Baer, move forward with their individual agreements.

Roland Meier, a spokesman for the Swiss Finance Ministry in Bern, declined to comment on the Tages-Anzeiger report.

The new proposal comes after the Swiss parliament in June rejected a bill that would have freed the industry to send information to the U.S. The bill, supported by Swiss banks, was aimed at helping firms not yet part of the U.S. probe avoid an indictment like that of Wegelin & Co., which pleaded guilty in January to helping American clients dodge taxes.

Paying Fines

Banks that aren’t currently under investigation that may have breached U.S. laws with undeclared assets would have to pay fines on accounts exceeding 50,000 francs ($54,407) under the proposal, according to Tages-Anzeiger.

The fines will depend on when the account was opened, with 20 percent for those that existed before August 2008, 30 percent for the period between Aug. 1, 2008 and Feb. 28, 2009 and 50 percent thereafter, according to the Swiss newspaper.

UBS AG, the country’s biggest bank, agreed in February 2009 to pay $780 million and disclose names of American clients to avoid criminal prosecution for helping customers evade taxes. That deal and the voluntary disclosures by Americans that followed allowed the U.S. to make a case against other Swiss wealth managers.

Information on American clients from August 2008 would be made available to the U.S. if requested through existing double-taxation agreements, Tages-Anzeiger said. Banks that didn’t have undeclared American accounts will have to prove that they didn’t break any U.S. laws, it said.

To contact the reporter on this story: Elena Logutenkova in Zurich at elogutenkova@bloomberg.net

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

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