Swiss Banks See Progress in Talks on U.S. Tax-Evasion Leniency
(Bloomberg) — Swiss banks are making progress in negotiations with the U.S. Justice Department on an agreement that would allow lenders to avoid prosecution in return for disclosing how they helped Americans dodge taxes, the head of an industry group said.
The process almost derailed in September when Swiss banks balked at a number of U.S. demands in a draft agreement that spells out how they can achieve amnesty through a disclosure program. They objected in particular to a demand that banks “cooperate fully” with “any other domestic or foreign law enforcement agency” in any future probes.
“The discussions are developing favorably,” said Patrick Odier, president of the Swiss Bankers Association. “There is progress, there is willingness from the banking industry to collaborate.”
The two sides appear to understand the “obstacles that have to be eliminated to make sure that this progress can go on,” he said Thursday in an interview at a conference in Zurich. Odier’s own bank, Cie. Lombard, Odier SCA, is among institutions participating in the program, which offers leniency in exchange for information and payment of a fine.
More than 100 firms signed up, about a third of Swiss banks, seeking to end a six-year crackdown on the world’s largest offshore haven. They don’t include about a dozen banks that were already under investigation in the U.S. when the program began in late 2013 and are awaiting the outcome of the probes.
Boris Collardi, chief executive officer of Julius Baer Group Ltd., one of the banks under investigation, said Feb. 2 he expects settlements this year for both groups. Zuercher Kantonalbank, which reported earnings Friday, is also under investigation, along with Banque Pictet & Cie SA.
Switzerland’s second-biggest bank, Credit Suisse Group AG, was fined $2.6 billion in May after pleading guilty to helping Americans cheat on their taxes.
In a letter to the Justice Department in October, a copy of which was obtained by Bloomberg News, banks said the draft agreement turns what was supposed to be a U.S. disclosure program into a global cooperation agreement without any safeguards or guarantees for the banks. The banks also objected to requirements that they disclose information on parent companies and that they share material with governments other than the U.S. They also dispute the scope of provisions on breaches of the agreement.
