• Switzerland's news in English

Swiss bank pays $4.4mn to avoid US tax rap

AFP · 11 May 2014, 09:32

Published: 11 May 2014 09:32 GMT+02:00

Facebook Twitter Google+ reddit

"The US tax issue is resolved," the Zurich-based asset manager's parent company the Lichtensteinische Landesbank (LLB Vaduz) said in a statement issued on Saturday.

Swisspartners and the US Justice Department had signed a "non-prosecution agreement" on Friday, Liechtenstein's oldest bank said, stressing that provisions had already been made to cover the multi-million-dollar fine and it would not impact the asset manager's earnings.

The agreement is part of a US push to find tax dodgers and punish the banks that help them.

Fourteen Swiss banks, including Credit Suisse, the country's second-biggest, are officially under US criminal investigation, while many others are opting to acknowledge past wrongs and accept fines to avoid prosecution.

According to US authorities, Swisspartners had between 2001 and 2011 assisted US clients "in opening and maintaining undeclared foreign bank accounts," leading to an approximate loss to the US taxman of $900,000.

Under the agreement signed Friday, the company will compensate that amount, as well as $3.5 million more representing the fees it earned in helping US clients skirt the law.

"Swisspartners doesn't have to pay any other fines or financial penalties," spokesman Cyrill Sele told AFP by email.

US Deputy Attorney General James Cole hailed the company, which had voluntarily handed over around 110 files on clients who were not compliant with US tax laws.

"The extraordinary cooperation of Swisspartners has enabled us to identify US tax cheats who have hidden behind phony offshore trusts and foundations," he said in a Justice Department document.

LLB Vaduz meanwhile said that now that the US tax issue had been resolved it would move ahead with its previously announced plans to sell off its subsidiary.

Saturday's announcement came as Credit Suisse is expected soon to be slapped with fines of at least $1.0 billion, as well as possible criminal charges.

Story continues below…

A damning US Senate report found that Credit Suisse at its peak in 2006 had more than 22,000 US customers with Swiss accounts whose assets stood as high as $12 billion -- mainly undeclared to US tax authorities.

Chief executive Brady Dougan apologised in February to US senators for the bank's actions, conceding it had undertaken elaborate efforts to gain new, secret American clients, but blamed the wrongdoing on a small band of rogue employees.

In 2009, Switzerland's largest bank UBS was forced to acknowledge it had used Swiss banking secrecy laws to help its US clients avoid paying taxes at home, and had to dish out a $780-million fine to US tax authorities.

Facebook Twitter Google+ reddit

Your comments about this article

Today's headlines
Presented by MoneyPark
How to get a mortgage in Switzerland
Houses in Zürich. Photo: Pixabay.

Ready to buy? Here’s what you need to know as an expat about Swiss regulations, how to finance your purchase, and why you should use a broker.

Autumn in Switzerland: ten stunning Instagram photos
Photo: Swiss Tourism/Jan Geerk

Switzerland is beautiful in all seasons, but as these photos show, autumn is a special time in the alpine country.

Report: Swiss progress slows on gender equality
File photo: David Soulivet

Globally, it will take 170 years to achieve gender equality, according to the World Economic Forum.

Brothers go to court to stop suicide of sibling
File photo: Lisa Edmonds

Two men have filed a legal bid to prevent the Swiss assisted suicide association Exit from helping their older brother to kill himself.

Wawrinka snubs past form to reach Basel second round
Wawrinka beat local wildcard Marco Chiudinelli. Photo: Fabrice Coffrini/AFP

US Open champion Stan Wawrinka has reached the second round in Basel after going out in the first round for the past four years.

Villagers asked to help fund bridge renovations
The bridge links the two villages of Veltheim (pictured) and Holderbank. Photo: Lutz Fischer-Lamprecht

The crowdfunding campaign by the two communes is the first of its kind in Switzerland.

Police discover body buried in Orbe house
File photo: Bas Leenders

Police have opened an investigation after finding a body buried in a house in Orbe, in the canton of Vaud, on Saturday.

Valais shaken by 4.2 magnitude earthquake
The earthquake hit in the canton of Valais near Sierre. Photo: Alain Rouiller

It's the biggest earthquake to hit the country for two years.

Swiss Indoors kicks off without champ Federer
Federer celebrates with ball girls and boys after winning the event in 2015. Photo: Harold Cunningham/Pool/AFP

Stan Wawrinka is top seed as injured Federer sits it out.

IOC hires Russian doping whistleblower as consultant
IOC President Thomas Bach confirmed the news. File photo: Fabrice Coffrini/AFP

The International Olympic Committee (IOC) has hired Vitaly Stepanov as a consultant and is helping his runner wife Yuliya.

Photo: Unterirdisch Ueberleben
Inside Switzerland’s largest nuclear bunker – 40 years on
Sponsored Article
Last chance to vote absentee in the US elections
Photo: The Local
Ticino firefighters rescue cow from swimming pool
Photo: Antoni Da Campo
Vegan wins battle to be accepted by Swiss army
Photo: Swiss Tourism
Ten Swiss ski resorts named most expensive in Europe
Photo: Randy Kashka
Swiss women will ‘work for free’ for the rest of year
Photo: Swiss Tourism
Montreux throws hat in Olympic rings
Photo: Swiss Tourism
Seven things you’ll miss about Switzerland if you leave
Photo: Richard Juilliard/AFP
Man makes Geneva airport bomb threat ‘for a joke’
Photo: AFP
Solar Impulse team reveals plans for unmanned plane
File photo: Martin Abegglen
Swiss to vote on passport rules for 3rd gen foreigners
Photo: AFP
Swiss wingsuit hotspot Lauterbrunnen won’t impose ban
Photo: Swiss Tourism
Six reasons Switzerland isn’t as boring as you might think
Photo: Swiss Tourism
Report: Switzerland one of world’s best places for girls
Photo: The Local
Thief returns Swiss cow bells worth thousands
File photo: Wikimedia Commons
One in three rapists isn’t locked up: statistics
Photo: activistin.ch
Tampon-tax protest turns Zurich fountains red
Photo: AFP
Geneva police to lift ban on bearded officers
Photo: Marcel Gillieron/AFP
Suicide chef’s restaurant keeps Michelin stars
Photo: Lara de Salis
11 things the Swiss get tired of hearing abroad
Photo:  Ivo Scholz/Swiss-image.ch
Survey: expats in Switzerland have money but few friends
Photo: AFP
Swiss press criticize Bern’s 'capitulation' on immigration
Photo: Jura Trois Lacs tourism
German ex-policeman is Swiss city’s new hermit
Photo: Dmitry A. Mottl
Ticino votes to favour local workers over foreigners
jobs available