More Banks Join US-Swiss Tax Program

Tom Burroughes

16 December 2013

began to announce they were taking part in a program overseen by the US Department of Justice that was agreed with the Swiss government in August this year. Swiss banks are deciding how they will sign up to the pact, designed to resolve a long-running dispute about tax evasion between Switzerland and the US. There are a number of different categories that firms can state they fall into, depending on whether they think they have violated laws about helping US tax evaders, or not.

“BCV has decided to participate in the US Department of Justice (DoJ) program concerning the US-Swiss tax dispute and will do so as a category 2 financial institution. This will not affect the bank’s distribution policy,” BCV said in a statement today.

“Owing to its market position in the Lake Geneva region – a highly international area – BCV has clients who are considered to be US Persons. Most are Swiss people living in the USA, Americans living in the Canton of Vaud, or dual citizens. As previously announced, US Persons have never been a target market for BCV, and BCV has never conducted business or client acquisition activities on US soil,” the bank continued.

“Over the past few months, BCV has been carrying out an extensive review of its business practices. The bank is convinced that its handling of US clients has been in line with Swiss laws and regulations. Moreover, BCV has never had a policy aimed at facilitating non-compliance by US Persons with their tax obligations. Given the uncertainty as to exactly what actions the DoJ will target as being non-compliant with US law, BCV cannot determine with certainty whether the US authorities will find fault with BCV’s handling of US clients. As a result, and in keeping with the bank’s sound approach to risk management, BCV has decided to participate in the program, for the time being as a category 2 financial institution,” it said.

BCV’s subsidiary Piguet Galland & Cie has also opted to take part in the program as a category 2 financial institution, it added.

St Galler

In its statement on the issue today, St Galler Kantonalbank said: "The Bank expresses its interest in a rapid and definitive settlement. At the same time, St.Galler Kantonalbank is responding to a request of FINMA addressed to all Swiss Banks to participate in the program. This procedure corresponds to a responsible behavior and brings security to clients, business partners, shareholders and employees."

"St Galler Kantonalbank emphasizes that US clients were never in focus of its business policy. Nevertheless SGKB had some US clients, many related to the canton of St Gallen. Investigations have now shown that some of these clients may not have properly fulfilled their tax obligations to the United States," it said.

"SGKB will report its participation in the category 2 no later than 31 December 2013. Subsequently, analyses of client bases and positions will be carried out. No later than 30 June 2014, based on this information, data about the US business will be delivered to the US authorities. This information will not include client data," it continued.

"Based on the information provided, the US Department of Justice will enter into individual negotiations with the bank with the aim to find an amicable solution. The conclusion of these negotiations is expected at the earliest in late 2014," it said.

SGK's subsidiaries are also entering the program under the category 2 classification. "The Boards of Hyposwiss Privatbank Zürich AG and Hyposwiss Private Bank Genève SA have decided separately and independently from St.Galler Kantonalbank to participate in category 2," SGK added.