TaxConnections Blogger PostsBank Frey has become the second of Switzerland’s smaller banks to announce it is ceasing operations as a result of the United States government’s drive against cross-border tax evasion.

The organization, founded in 2000, says it is solvent and will not be liquidated. It has merely decided that the costs associated with the US tax dispute, together with increasingly difficult market conditions, ever-growing regulations and the unsustainable requirements’ have become too high to justify its banking operations.

Frey & Co.’s Executive Board, together with shareholders, came to the decision last week. Frey & Co. is currently the subject of a Department of Justice investigation, meaning that it is unable to take advantage of a settlement deal offered by the DOJ to Swiss “Category 1” banks.

In August, the DOJ and the Swiss Federal Department of Finance unveiled a scheme designed to encourage Swiss banks to cooperate in the DOJ’s investigations into the use of foreign bank accounts to commit tax evasion. (See Swiss Banks Agree to Plan to End Past US Tax Evasion Issues!).

Under the program, participating banks are: Read More