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