Thursday, June 23, 2011

More Saber Rattling At Offshore Banks Playing the Offshore Bank Game (6/23/11)

Bloomberg news today has this report buried among other news (emphasis supplied):

The U.S. could try to bar certain foreign banks from the federal banking system for helping American citizens evade taxes through offshore accounts, a prosecutor said.

Kevin Downing, who led the prosecution of UBS AG (UBSN) in 2009, said the Justice Department’s tax division is reviewing correspondent accounts used by foreign banks without a presence in the U.S. Prosecutors could take action against some of those banks, Downing said yesterday at a New York City Bar Association event.

* * * *

Prosecutors said UBS violated its so-called qualified intermediary agreement with the Internal Revenue Service after promising to give tax information to the IRS about American clients holding securities in Swiss accounts. UBS was supposed to withhold taxes at a 28 percent rate if clients didn’t declare their accounts to the IRS. Downing said UBS is not alone.

“A lot of these banks are in violation of those agreements with respect to their cross-border banking,” Downing said. “In such a case, the IRS is in a position where they could pull the QI agreement, which is financially devastating for a foreign financial institution.”

Foreign banks seeking to avoid indictment must disclose its own wrongdoing to the Justice Department, Downing said.


  1. It will be interesting when IRS tries to apply all this stuff on the Chinese. You think they may say go fly a kite?

  2. Looks like Credit Suisse is now in play. If you have or had an undisclosed Credit Suisse account, hopefully you have already placed your head in the chopping block and "got in line brother". It seems rather strange that the U.S. and Swiss governments are supposed to be in negotiations for a "global settlement" and then you hear that another big bank has DOJ problems. Could this be a pressure tactic to strengthen DOJ's position? Regardless, if you have or had one of these Credit Suisse accounts, the situation has become critical. The article is here:



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