On August 29, 2013, the US Department of Justice (“DOJ”) and Swiss authorities jointly announced a landmark non-prosecution program for any Swiss bank that is not a current target of US criminal investigation. On the Swiss side, the agreement with DOJ was signed by the Swiss Federal Department of Finance. The program is designed to encourage all Swiss banks to come forward and admit the role they played in assisting US persons to evade tax. Participating banks that meet all of the demands made by DOJ are eligible for non-prosecution agreements – but employees and agents of the banks are shockingly not protected.

In order to participate, the Swiss banks must undertake arduous internal investigations to sniff out any “US related accounts”, appoint an independent examiner to review the due diligence, make a complete disclosure about the bank’s cross-border activities; provide detailed information on all US related accounts that existed on August 1 2008; and pay a penalty of 20, 30 or 50 percent of the maximum value of all non-disclosed US accounts that were held by the bank. The applicable penalty percentage depends on the date the accounts were opened with the bank with the penalty increasing after news became public that the US government was investigating Swiss banks for offshore tax evasion (a 20 percent penalty is imposed on the maximum aggregate dollar value of all undisclosed US accounts that existed at the bank on August 1, 2008; increasing to 30 percent for undisclosed accounts that were opened after that date, but on or before February 28, 2009 and to 50 percent for undisclosed accounts opened after February 28,2009).

Full details can be found in the signed Agreement.

What is a “US-Related Account”? Read More