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Four more Swiss banks sign US non-prosecution deals

Monday, 1 June, 2015

STEP Lead

Another four Swiss private banks have signed non-prosecution agreements with the US Department of Justice (DoJ) over allegations that they helped their American clients evade tax.

The four banks are: Société Générale Private Banking Lugano-Svizzera; MediBank, of Zug; LBBW, of Zurich; and Scobag Privatbank, of Basel.

The four banks were among approximately 100 that signed up to the US DoJ's Swiss Bank Program at the end of 2013. This program offers the banks immunity from prosecution in return for paying a fine and promising to cooperate with the US DoJ's investigations of individual tax evaders – which means disclosing their clients' bank details as well as informing on third parties such as wealth advisors and other banks. They also have to close the accounts of US clients who are not compliant with US reporting obligations.

According to the DoJ, Société Générale had held 109 US-owned accounts since August 2008 with a peak of assets under management of USD140 million. It has to pay a fine of USD1.36 million.

MediBank only had 14 US-owned accounts during the period in question, with assets under management of USD8.6 million. However, according to the DoJ's press release it compounded this conduct by allowing American clients of UBS to open accounts after it became public that the US DoJ was investigating UBS in 2007. It has been fined USD826,000.

The other two banks, which maintained 50 US-owned accounts between them received more lenient fines. LBBW is to pay USD34,000 and Scobag Privatbank USD9,090.

US accountholders at these four banks who have not yet declared their accounts to the Internal Revenue Service may still be eligible to participate in the US offshore voluntary disclosure program (OVDP). However the banks' settlement with the US DoJ has increased the price of joining the OVDP from 27.5 per cent of the accountholders' maximum account balance to 50 per cent.

  • Non-prosecution deals with three other banks – BSI, Vadian and Finter – had previously been announced. Some 14 banks that were already under US investigation are expressly excluded from the amnesty, as are their clients.

Sources