The Department of Justice last week announced that two more banks—Banque Pasche and ARVEST Privatbank—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. Banque Pasche will pay a $7.2 million penalty, and ARVEST will pay a $1 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 signed last week, 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 Banque Pasche and ARVEST, 15 other Swiss banks have reached such agreements with the Justice Department. "The growing number of non-prosecution agreements for the Swiss Bank Program demonstrates the [Justice Department’s] and [Internal Revenue Service] resolve to make it increasingly difficult for taxpayers to leave offshore accounts undeclared,” said Douglas O’Donnell, deputy commissioner of the IRS Large Business and International Division.
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