August 3, 2012 8:35 pm

US in fresh tax-evasion request to Swiss

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The US has made a renewed request to Swiss authorities for information about Credit Suisse clients suspected of using the bank to evade taxes, in the latest instalment of a long-running tussle over Bern’s bank secrecy laws.

A previous request was rejected by a federal administrative court in Switzerland’ in April, as it did not specify the names of the individuals about which the US was seeking information, but instead listed various criteria that hinted at tax evasion.

The new formulation does not name individuals either, but has a more precise set of criteria designed to target a similar group of people, according to a person familiar with the matter.

In all, fewer than 100 Credit Suisse clients are affected.

The bank confirmed that the Swiss tax authorities in Bern had asked it to provide information, but declined to comment further.

Switzerland’s banking secrecy laws date back to 1934, but have come under increasing pressure since the financial crisis began, as cash-strapped governments around the world chase tax revenues that have previously eluded them.

Last year, Switzerland signed new tax agreements with Britain and Germany, although the German accord has yet to be finally ratified.

In 2009, UBS, Switzerland’s biggest bank and one of the world’s largest wealth managers, paid $780m to settle criminal charges, and the Swiss authorities instructed the bank to provide the names of almost 5,000 US clients.

Since then, the US investigation has been broadened to include other Swiss banks, including Credit Suisse and Julius Baer. In all, 11 Swiss banks are currently being investigated on suspicion of helping wealthy US citizens to evade taxes.

The first charges came in February, when the Southern District Court of New York filed criminal counts against Wegelin, the oldest Swiss private bank, for allegedly helping Americans evade paying taxes on $1.2bn in assets.

Since the UBS settlement, Switzerland has been trying to negotiate a new deal with the US over double taxation. The existing deal, which dates from 1996, differentiates between tax fraud and tax evasion.

The Swiss authorities are currently only required to assist their US counterparts in the case of tax fraud. A new deal, if ratified, would require Switzerland to provide information in both cases.

In November, Credit Suisse revealed it had set aside SFr295m ($304m) to cover part or all of its share of a potential settlement.

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