icon bookmark-bicon bookmarkicon cameraicon checkicon chevron downicon chevron lefticon chevron righticon chevron upicon closeicon v-compressicon downloadicon editicon v-expandicon fbicon fileicon filtericon flag ruicon full chevron downicon full chevron lefticon full chevron righticon full chevron upicon gpicon insicon mailicon moveicon-musicicon mutedicon nomutedicon okicon v-pauseicon v-playicon searchicon shareicon sign inicon sign upicon stepbackicon stepforicon swipe downicon tagicon tagsicon tgicon trashicon twicon vkicon yticon wticon fm
3 Sep, 2013 13:55

Swiss banks apologize for aiding tax cheats, set 2015 deadline for settlements

Swiss banks apologize for aiding tax cheats, set 2015 deadline for settlements

Swiss banks have issued a formal apology for helping US clients avoid taxes, and have also slated 2015 to fulfill final settlements over tax disputes, days after they agreed to divulge client information to US officials.

“The situation would be sorted out within the next 12 to 18 months,” chairman of Swiss Bankers Association  Patrick Odier told reporters in Zurich today. “That’s the advantage of having a program.”

The banks promised to hand over information on clients who have allegedly avoided paying taxes via secret Swiss accounts, and in return, the US will collect settlements from banks who facilitated the clandestine methods.

"It was not because we lacked skills and knowledge that we found ourselves in these unfortunate situations. It was because we acted wrongly and we displayed wrong conduct,"  Odier said at the news conference.

Swiss Bankers Association President Patrick Odier (AFP Photo / Fabrice Coffrini)

The apology came after a landmark move when Swiss banks disclosed client names to US officials, resolving the long-standing tax evasion dispute between the two countries. The deal will also help most banks avoid prosecution.

"I regret this all the more because we have damaged the reputation of the entire Swiss financial center," said Odier.

The deal, announced on August 29 by the US government, will grant ‘amnesty’ to about 100 second-tier Swiss banks in exchange for the names of US clients who have avoided paying taxes using secret accounts. The banks could still face fines of up to 50 percent of the asset value if they provide full disclosure, which Odier assured the banks are capable of paying.

Over a dozen Swiss banks are said to be under US investigation, but the big ones- Credit Suisse, HSBC Holdings PLC and Julius Baer Group Ltd- will still face prosecution. 

The Swiss Bankers Association said the deal "enables all banks in Switzerland to settle their US past quickly and conclusively and creates the necessary legal certainty."

Earlier this year the Swiss government ordered its third largest private bank, Julius Baer, to hand over data on US clients.

Switzerland’s oldest private bank, Wegelin & Co, closed shop this year after it pleaded guilty to helping wealthy Americans hide more than $1.2 billion from tax officials. The bank paid a $58 million fine.

Switzerland’s largest bank, UBS, agreed to give away some 5,000 client names and paid a $780 million settlement in 2009 after admitting to selling tax-evasion services to 52,000 Americans.

Following a public scandal in France, bank secrecy was written into Swiss law in 1934. It has served as a financial safe haven for funds from all corners of the world, and its tight-lipped policy helped it build its $2.2 trillion financial industry.