Swiss Agree on Penalties for Banks That Aided Tax Cheats

By LYNNLEY BROWNING, NYT

Switzerland and the United States reached a watershed deal on Thursday to punish Swiss banks that helped wealthy Americans stash money in hidden offshore accounts, closing the door on an era of bank secrecy and tax evasion.

The formal agreement, which was announced on Thursday by the Justice Department in Washington and will be presented by Swiss authorities on Friday, outlined formulas for Swiss banks to pay up to billions of dollars in fines and disclose information about American account holders, a joint statement said.

The deal calls for stiff measures that lift the veil of Swiss secrecy. Banks will be required to provide the details on accounts in which American taxpayers have an interest through treaty channels, inform on other banks that transferred money into secret accounts or that accepted money when secret accounts were closed, disclose all cross-border activities, and close the accounts of Americans who are evading taxes.

Significantly, the deal does not cover 14 Swiss banks and Swiss branches of international banks that are under criminal investigation by the United States authorities, including Credit Suisse, Julius Baer and several regional banks. Instead, it effectively covers the rest of the Swiss banking industry, home to a tradition of bank confidentiality and laws that have not considered tax evasion a crime. By some estimates, Switzerland is home to more than $2 trillion in overseas deposits.

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