The Department of Justice last week announced that two more banks—Migros Bank and Graubündner Kantonalbank—have reached resolutions under the Department’s Swiss Bank Program, which provides a means for Swiss banks to resolve potential criminal liabilities in the United States. Migros will pay a $15 million penalty, and Graubündner will pay a $3.6 million penalty, in return for a non-prosecution agreement for tax-related criminal offenses.

To be eligible to enter the program, which was established in 2013, Swiss banks were required to advise the Justice 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 already under criminal investigation related to their Swiss-banking activities and all individuals were expressly excluded from the program.

Under the program, banks are eligible to enter into a NPA if they:

Make a complete disclosure of their cross-border activities;

Provide detailed information on an account-by-account basis for accounts in which U.S. taxpayers have a direct or indirect interest;

Cooperate in treaty requests for account information;

Provide detailed information as to other banks that transferred funds into secret accounts or that accepted funds when secret accounts were closed;

Agree to close accounts of account holders who fail to come into compliance with U.S. reporting obligations; and

Pay appropriate penalties.

According to the terms of the NPAs announced Sept. 25, each bank agrees to cooperate in any related criminal or civil proceedings, demonstrate its implementation of controls to stop misconduct involving undeclared U.S. accounts and pay penalties in return for the Department’s agreement not to prosecute these banks for tax-related criminal offenses.

In addition to Migros and Graubündner, 37 other Swiss banks have reached such agreements under the Swiss Bank Program, according to data compiled by the Justice Department. “A significant element of this program has been the influx of highly-detailed account data along with information about the variety of schemes used to hide assets overseas,” said Chief Richard Weber of IRS-Criminal Investigation. “This information will continue to be used on both an individual and global basis to combat international tax evasion.”

 

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