The article discusses banks that have announced or are rumored to be considering dropping out of the U.S. DOJ program.
So why should a bank virtually accuse itself of aiding tax cheats one day and the next walk away from a treaty that protects it from potentially ruinous criminal indictment?
Part of the reason can be traced back to the birth of the Swiss-US non-target letter deal in August 2013, a period of intense uncertainty and danger for the whole Swiss banking sector.
In January 2012, Wegelin was found guilty of aiding tax cheats by a US court and ended its 273-year existence. In the summer, the Swiss parliament rejected a government proposal to end the long-running tax evasion dispute by handing over client details to the US.
The scene looked set for more Wegelin-style casualties, a dire outlook that was brought into sharper focus when Bank Frey ceased operations in October because it could not afford to fight the US authorities.
The country’s regulator, the Swiss Financial Market Supervisory Authority (FINMA), urged banks to swiftly join the non-target letter programme despite protests that the details were too vague and that banks needed time to comb through their accounts for US tax cheats.In addition, the article addresses banks that never joined as Category 2.
However, the suspicion remains that other banks are playing a far more dangerous game by never entering the scheme in the first place.
“Certain banks may have decided not to register in the programme on the basis of a cost-versus-risk assessment,” said Troller. “Their rationale being that if they should ever get prosecuted, then the fines or other consequences would be more manageable than the cost of entering the system in the first place.”
The DoJ made it very clear on brokering the non-target letter deal that non-compliant banks could face serious sanctions if they do not admit the error of their ways and are caught.And, caught in the middle are innocent U.S. taxpayers:
Caught in the crossfire of these strategies, however, are thousands of bank clients who are either innocent of tax evasion offences or were unaware of their reporting responsibilities.
These include US citizens living and working in Switzerland who cannot open bank accounts or take out mortgage loans. In some cases they have been expelled by their banks as involving too much unwanted paperwork and risk.
A number of dual Swiss/US citizens have also complained at being unnecessarily dragged into the row and have been saddled with competing a time-consuming and expensive paper trail proving that they have never worked – or indeed in some cases never lived – in the US.