Legal
Credit Suisse, BNP Paribas Face Risk Of US Criminal Charges Over Tax - Report

BNP Paribas and Credit Suisse are in danger of having criminal charges brought against them by US and state prosecutors over helping US citizens evade taxes, a report has said.
BNP Paribas and Credit Suisse are in danger of having criminal charges brought against them by US and state prosecutors over helping US citizens evade taxes, Bloomberg has reported, citing an unnamed source.
Separately, BNP has today said that it might be hit with a US
fine that is "far in excess" of the $1.1 billion provision it set
aside last year to cover litigation costs linked to potential
breaches of US sanctions.
"The discussions that took place during the first quarter of 2014
concerning U.S. dollar payments involving countries subject to
U.S. sanctions demonstrate that a high degree of uncertainty
exists as to the nature and amount of penalties that the U.S.
authorities could impose on the Bank following completion of the
ongoing process: there is the possibility that the amount of the
fines could be far in excess of the amount of the provision," BNP
said in its first quarter earnings release.
The report said that Zurich-listed Credit Suisse has been the
target since 2011 of a US criminal probe into whether it helped
Americans evade taxes. BNP Paribas has been the subject of a
federal probe into possible violations of sanctions barring
business with prohibited countries, the report said.
Prosecuting the companies would break with a past practice of
brokering settlements with large banks that are considered
integral to the financial system. Previous probes have been
resolved through so-called non-prosecution and
deferred-prosecution agreements, which have been criticised by
U.S. senators for failing to hold banks accountable for breaking
the law, the report said.
The US Justice Department’s tax division and prosecutors in
Alexandria, Virginia, are leading the tax probe of Credit Suisse.
Manhattan US Attorney Preet Bharara, Manhattan District Attorney
Cyrus Vance Jr and David O’Neil, the head of the Justice
Department’s criminal division in Washington, are working
together in the BNP Paribas investigation, the report’s source
was quoted as saying.
The report said both banks have declined to comment on the
investigation; Credit Suisse has previously said it is
cooperating with the DoJ probe.
Swiss and other banks have been in the cross-hairs of US
authorities in recent years. The most prominent case to date has
been that of UBS, which in 2009 settled criminal and civil
charges that it aided US tax evaders. In another case, Wegelin,
Switzerland’s oldest bank, was shut down in the US and its
remaining Swiss operations were folded into a new structure after
being charged in the US with aiding tax dodgers.
Last August, the Swiss and US governments signed an accord under
which Swiss banks have the option of stating whether there is a
risk – or not – of them having violated US tax laws. Out of the
300-plus banks in Switzerland, around a third are said to have
signed up to the accord.