US and Switzerland agree tax evasion bank deal

US and Switzerland agree tax evasion bank deal
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The US Justice Department has reached a deal with the Swiss government over tax dodging by Americans using offshore bank accounts in Switzerland.

As a result a number of Swiss banks would pay fines to avoid or defer prosecution.

The deal is a step forward in a long-running US drive to pierce the shroud of Swiss bank secrecy.

However analysts said it was too early to say how much the Swiss banks would have to pay or how much extra revenue would flow to the United States.

“On the whole it’s a pretty strong agreement,” said Heather Lowe, director of government affairs at anti-graft watchdog Global Financial Integrity, though she said there were “gaps”, such as whether banks could settle without turning over US client names. “That is definitely one open question here.”

The deal will apply to about 100 second-tier Swiss banks.

They would have to hand over to the US authorities some previously hidden information.

They will then face penalties of up to 50 percent of the assets they managed on behalf of wealthy Americans.

The deal does not cover 14 banks already under US criminal investigation.

They include some of Switzerland’s biggest – such as Credit Suisse, Julius Baer, the Swiss arm of Britain’s HSBC, privately held Pictet, and state-backed regional banks Zuercher Kantonalbank and Basler Kantonalbank.

Several of these have said they are preparing information on client withdrawals as demanded by US investigators, after the Swiss government said it would allow them to circumvent secrecy and privacy laws to do so.

UBS, Switzerland’s biggest bank, reached a landmark $780 million settlement with US authorities in 2009 after admitting it helped American tax cheats..

That probe yielded information that has contributed to a criminal investigation currently focused on the 14 other banks.

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