US requested to relax disclosure program by Swiss banks

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Swiss banks looking to avoid U.S. sanctions disclosing how they helped American citizens evade taxes asked the Justice Department this week to retreat demands, including that they cooperate with other countries.
Swiss banks looking to avoid U.S. sanctions disclosing how they helped American citizens evade taxes asked the Justice Department this week to retreat demands, including that they cooperate with other countries. 73 Swiss banks wrote to reject the terms of a proposed non-prosecution agreement that details how banks can achieve amnesty through a disclosure program announced last year.

More than 100 firms, or about a third of Swiss banks, signed up for the program in December, seeking to end a six year restriction on the world’s largest offshore haven. The banks want certainty that they can move forward without facing prosecution from the Internal Revenue Service (IRS). The letter protests that the program suggested by the Justice Department doesn’t provide that reassurance.

The banks also object to requirements that they disclose information on parent companies and that they share material with governments other than the U.S.

They are hopeful that the request is acknowledged ‘If the larger banks lobby together over the points they deem unreasonable, the Justice Department may relax some elements of the model agreement, otherwise they must accept it as it is, or withdraw from the program’, said Milan Patel, a lawyer at Anaford AG in Zurich.

The proposal was sent a week after the final deadline for handing over information, according to the letter. The Justice Department is working through papers detailing figures, business plans for the names of employees and external advisers who helped devise offshore companies to hide money from the IRS.