“So, one element is the handover of information and the other element is the fines. Four categories have been established. The bank in question must evaluate itself and then say “I’m in group 2. I have to pay such-and-such a fine.” The bank itself must determine its own fine.

“The DoJ published a unilateral programme last Friday. It has two elements: (a) fines and (b) information. Each bank in Switzerland, depending on the nature of its business, has to determine the category to which it belongs. They can’t lie because the information has to contain information about transactions with other banks. The DoJ will therefore be able to cross-reference everything and if the bank is lying it will find out.

“There does not have to be any new legislation to make this happen. The DoJ’s policy is unilateral. Swiss law forbids its banks to pass information on to the Americans if that is against Swiss interests. So, the Swiss Federal Council can grant allowances to the banks in Switzerland. 

A permission for this specific case is to be granted to each bank. The granting process is underway but will take time.” 

Category 1: This “regroups” - i.e. contains – all the banks that are already under investigation by US authorities. The banks in this category can have nothing to do with the programme. They are settling fines with the DoJ independently. 

Category 2: This contains banks that most probably have helped Americans break US law. They will have to pay fines and hand over information about their accounts. They are also seeking non-prosecution agreements. They must assess themselves for fines. 

Category 3: US clients are invovled but in this category US law has not been broken, or at least the banks in this catetory are banks that have determined that they have not helped anyone break it. The IRS will decide whether they are right in the fullness of time. 

Category 4: These are banks that only cater for local clients. They are “deemed compliant,” in the language of FATCA. 

Swiss banks in category 1 that are not eligible include , a partner who works at the firm’s office in Zurich, said: “Following the agreement of the new disclosure deal, US taxpayers will need to act with some urgency if they have any undisclosed accounts that are, or were previously, held in Switzerland. US taxpayers disclosed to US authorities under this new programme are very likely to have the IRS-sanctioned compliance procedures – such as the Offshore Voluntary Disclosure Program and the more recent streamlined disclosure procedure – closed off to them, which may result in much higher penalties and even exposure to criminal prosecution. 

“Banks that decide to participate in the US programme will have to ask the Federal Council for individual authorisation in accordance with Article 271 of the Criminal Code. However, this authorisation does not apply to client data, which can be provided only within the scope of administrative assistance based on the double taxation agreement of 1996 and the protocol of 23 September 2009, once the latter enters into force. Banks must comply with applicable Swiss law within the scope of their cooperation with the US authorities, particularly concerning data protection and employment law provisions. These principles have been expressly set out in the Federal Council’s model authorisation.”

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