According to a Tax Notes Today article (Kristen Parillo, Switzerland, U.S. Sign FATCA Agreement (TNT 2/15/13):
The Swiss IGA largely follows the Model II template released by Treasury in November, although there are some deviations that seem to reflect the more sensitive nature of the Swiss-U.S. negotiations. For example, the opening of the Swiss IGA includes the recital: "Whereas, in the expectation of contributing to a solid basis for an enhanced cooperation in tax matters with the United States, Switzerland is supportive of the implementation of FATCA."
* * * * [Jane Newton of DLA Piper's London Office said that] the Swiss IGA does not contain a commitment, contained in article 5 of Model II (and article 6 of Model I), to work with other countries to develop a common model for automatic information exchange.
The omission of that commitment reflects the Swiss government's cautious approach to entering into special tax cooperation agreements, Newton said. "The Swiss have been taking a risk-based approach to these agreements and are only signing bilateral agreements with countries that are economically important to Switzerland -- the U.S., the U.K., Austria, and Germany," she said, referring to the withholding tax agreements Switzerland signed with the United Kingdom, Austria, and Germany (although the German parliament did not approve the agreement).
Granwell noted that there is a significant difference between the approach taken by the Swiss withholding agreements and the Swiss IGA: the former generally preserve Swiss bank secrecy, while the latter does not. Under the IGA approach, the residence country obtains information on its residents' Swiss bank accounts. Under the withholding agreement approach, the residence country obtains tax revenue through anonymous withholding on its residents' Swiss bank accounts, but generally doesn't receive information on those accounts.
The Swiss IGA contains an enabling clause, not included in the Model II template, stating that Swiss financial institutions that enter into an FFI agreement with the IRS or register with the IRS as deemed-compliant FFIs are authorized and therefore not liable to any penalty according to article 271 of the Swiss Criminal Code. That provision paves the legal and legislative way for Swiss financial institutions to be able to register with the IRS, said Newton.
The enabling provision also reflects "an acute sensitivity to Swiss bank secrecy and how the IGA explicitly provides that a Swiss financial institution that registers and becomes a reporting/compliant entity won't be liable for a penalty," said Granwell, adding that the enabling provision also ties in with the irrevocable consent account reporting provisions of article 3 of the IGA.
Newton and Granwell noted that the Swiss IGA goes further than the Model II template by providing a deadline on when Swiss financial institutions must report to the IRS the aggregate number and aggregate value of all non-consenting U.S. accounts (no later than January 31 of the year following the year to which the information relates). The deadline for when Swiss financial institutions must report the number of nonconsenting nonparticipating financial institutions to which foreign reportable accounts were paid during the year, and the aggregate value of those payments, has been shortened: The deadline under Model II is March 15 of the year following the year to which the information relates, but the Swiss IGA gives a January 31 deadline.Other articles:
Patrick Temple-West, Switzerland, U.S. sign pact on fighting tax evasion (Reuters 2/14/13), here.
Robert W. Wood, US and Switzerland Sign New FATCA Agreement (Forbes 2/14/13), here.