US tax “ultimatum” has Swiss banks sweating

Some 11 Swiss banks must hand over thousands of client names and pay billions in fines to avoid tax evasion prosecution in the United States

Swiss newspapers claim the deadline for the US ultimatum passed on Tuesday night. However, banks are keeping tight lipped over claims that they would also have to provide all correspondence with offshore clients over the past 11 years.

Information gleaned by the SonntagsZeitung and Tages-Anzeiger newspapers points to the US authorities demanding some 6,500 account details and around $3 billion (SFr2.8 billion) in fines from the 11 banks.

It has been widely reported that the Swiss authorities had hoped to negotiate a catch-all civil settlement that included all Swiss banks. But those hopes appear to have been dashed by the DoJ’s determination to pursue criminal probes into the 11 worst offenders.

The prospect of a criminal prosecution has placed banks under far greater pressure as a conviction could spell the end of their activities in the US.
Banking clients can expect little protection from the Swiss courts despite the strong tradition of legal banking secrecy in the country.

Under the terms of the UBS deal which was ratified by the Swiss parliament in 2010, the US authorities could legitimately demand information from other banks that demonstrate “behavioural patterns” of tax evasion.