On December 13, 2013, two Swiss Banks, Raiffeisen and Postfinance, joined the growing number of Swiss Banks who announced their participation in the The Program for Non-Prosecution Agreements or Non-Target Letters for Swiss Banks (the “Program”) initiated by the U.S. Department of Justice (“DOJ”) on August 29, 2013 – an event long anticipated by many OVDP lawyers, including the OVDP lawyers Little Rock. These news further confirm the precarious situation of the U.S. taxpayers with undisclosed foreign accounts in Switzerland.
OVDP Lawyers Little Rock: The Program
The DOJ, in cooperation with the Swiss government, instituted the Program at the end of August of 2013. I already described the Program in detail in another article; for the purpose of the present writing, it is sufficient to state that the Program is essentially a voluntary disclosure program for Swiss Banks, not that dissimilar from the OVDP (the Offshore Voluntary Disclosure Program) currently available to U.S. taxpayers. Essentially, in return for turning over very detailed information about their cross-border operations and U.S. accountholders with accounts over $50,000 (going back to August 1, 2008), the banks receive either a Non-Prosecution Letter or a Non-Target Letter which basically promises that the U.S. government is not going to criminally prosecute or target the participating banks. As in the OVDP, the Program excludes banks currently under the DOJ investigation from participating in the Program. Another similar with the OVDP feature – category 2 banks will pay a hefty penalty.
OVDP Lawyers Little Rock: Why the Joining of Raiffeisen and PostFinance Significant
Size matters, and this why the cooperation of Raiffeisen and PostFinance is important. Raiffeisen is the third largest bank in Switzerlan. Postfinance, is the banking arm of the Swiss state-owned postal services company and the fifth-biggest retail financial institution in Switzerland.
OVDP Lawyers Little Rock: Growing Number of Swiss Banks Join the Program
A total of seven banks (among them: St. Galler Kantonalbank, Valiant Holding, Berner Kantonalbank and Vontobel Holding AG) have now come forward to say that they are participating in the Program. Most of them will participate as a Category 2 bank while the rest intend to participate as a Category 3 bank. PostFinance will be participating in the Program as a Category 2 bank, while Raiffeisen said that it is likely that it will register as a Category 3 bank (even though, the bank did not rule the possibility that some of the its U.S. clients may have been non-compliant with U.S. tax laws). It seems that Vontobel is the only other bank that adopted this position.
These seven banks, however, constitute but a tiny part of the total number of banks who are likely to participate in the Program. While the total number of banks varies, it is expected that about 100 banks are expected to enter the Program by December 31, 2013, deadline.
The DOJ strongly encourages Swiss Banks to participate in the Program and promises tough action with respect to non-participating Banks. “Banks that facilitated U.S. tax evasion but do not come forward by the December 31 deadline bear significant risks that information provided by others may cause the bank to be targeted and prosecuted,” said Assistant Attorney General Kathryn Keneally.
Side Effect on Category 1 Banks
The Program has had a peculiar side effect on the Category 1 banks who are not eligible to participate in the Program (e.g. UBS, Credit Suisse, Julius Baer, et cetera). The cases of these banks have been frozen by the DOJ pending the resolution of the Program in the wider Swiss banking sector.
As some OVDP Lawyers Little Rock may predict, the number of banks that participate in the Program will likely affect the DOJ’s attitude toward the other banks.
Direct Effect of the Program: Non-Compliant US Taxpayers Should Consider Voluntary Disclosure NOW
The effect of the Program on US Taxpayers with undisclosed Swiss accounts is very direct and severe. They are quickly running out of options. If they do not consider their voluntary disclosure options at this point, they may lose the ability to participate in the IRS Offshore Voluntary Disclosure Program (“OVDP”).
Contact Sherayzen Law Office for Help with the Voluntary Disclosure of Your Swiss Financial Accounts
Given the time limitations, it is extremely important that you contact Sherayzen Law Office as soon as possible. Owner Eugene Sherayzen, an experienced offshore voluntary disclosure attorney will thoroughly analyze your case, identify the available voluntary disclosure options, prepare your voluntary disclosure package and negotiate the Closing Agreement with the IRS (for the OVDP cases).