Justice Department reaches final resolutions under Swiss Bank Program
The Program provided a path for Swiss banks to resolve potential criminal liabilities in the United States, and to cooperate in the Department’s ongoing investigations of the use of foreign bank accounts to commit tax evasion.
The Program also provided a path for those Swiss banks that were not engaged in wrongful acts but nonetheless wanted a resolution of their status.
Banks already under criminal investigation related to their Swiss-banking activities and all individuals were expressly excluded from the Program.
“The Swiss Bank Program has been and continues to be a vital part of the Justice Department's efforts to aggressively pursue tax evasion,” said Attorney General Loretta E. Lynch.
“This groundbreaking initiative has uncovered those who help facilitate evasion schemes and those who hide funds in secret offshore accounts; improved our ability to return tax dollars to the United States; and allowed us to pursue investigations into banks and individuals.
“I want to thank the Swiss government for their cooperation in this effort, and I look forward to continuing our work together to eradicate fraud and corruption.”
The Program established four categories of Swiss financial institutions.
Category 1 included Swiss banks already under investigation when the Program was announced, and therefore, not eligible to participate.
Category 2 was reserved for those banks that advised the department by Dec. 31, 2013, that they had reason to believe that they had committed tax-related criminal offenses in connection with undeclared U.S. related accounts.
Banks eligible for Category 3 of the Program were those that established, with the assistance of an independent internal investigation of their cross-border business, that they did not commit tax or monetary transaction-related offenses and have an effective compliance program in place.
Category 4 of the Program was reserved for Swiss banks that were able to demonstrate that they met certain criteria for deemed-compliance under the Foreign Account Tax Compliance Act (FATCA). Category 4 banks also were eligible for a non-target letter.
Between March 2015 and January 2016, the Department executed non-prosecution agreements with 80 Category 2 banks and collected more than $1.36 billion in penalties.
The Department also signed a non-prosecution agreement with Finacor, a Swiss asset management firm, reflecting the Department’s willingness to reach fair and appropriate resolutions with entities that come forward in a timely manner.
Between July and December 2016, four banks and one bank cooperative satisfied the requirements of Category 3, making them eligible for Non-Target Letters. No banks qualified under Category 4 of the Program. ■