During the last two weeks of 2015, the United States Department of Justice announced that Bank Lombard Odier& Co Ltd, DZ Privatbank (Schweiz) AG, Bank J. Safra Sarasin AG, Coutts & Co Ltd, Gonet & Cie, and Banque Cantonal du Valais reached resolutions under the department’s Swiss Bank Program. These banks collectively will pay penalties of more than $285 million.
The Swiss Bank Program, which was announced on Aug. 29, 2013, provides a path for Swiss banks to resolve potential criminal liabilities in the United States. Swiss banks eligible to enter the program were required to advise the department by Dec. 31, 2013, that they had reason to believe that they had committed tax-related criminal offenses in connection with undeclared U.S.-related accounts. Banks already under criminal investigation related to their Swiss-banking activities and all individuals were expressly excluded from the program.
Under the program, banks are required to:
•· Make a complete disclosure of their cross-border activities;
•· Provide detailed information on an account-by-account basis for accounts in which U.S. taxpayers have a direct or indirect interest;
•· Cooperate in treaty requests for account information;
•· Provide detailed information as to other banks that transferred funds into secret accounts or that accepted funds when secret accounts were closed;
•· Agree to close accounts of accountholders who fail to come into compliance with U.S. reporting obligations; and
•· Pay appropriate penalties.
Swiss banks meeting all of the above requirements are eligible for a non-prosecution agreement.
According to the terms of the non-prosecution agreements signed in late December, each bank agrees to cooperate in any related criminal or civil proceedings, demonstrate its implementation of controls to stop misconduct involving undeclared U.S. accounts and pay a penalty in return for the department’s agreement not to prosecute these banks for tax-related criminal offenses.