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NPA Agreements Executed Under the Swiss Bank Program Surpass Sixty in Number

News

Posted in on March 16, 2016

On December 10, 2015 the United States Department of Justice announced that it had reached resolutions with Cornèr Banca SA (Cornèr) and Bank Coop AG (Bank Coop) under the department’s Swiss Bank Program.  These two resolutions bring the number of non-prosecution agreements (NPAs) executed under the Swiss Bank Program to a total of 61 and it is likely that the number of NPAs will continue to increase before the year’s end, with the Internal Revenue Service expecting a total of 80 entities to complete the NPA process.

The Swiss Bank Program was first announced on August 29, 2013 in a joint statement issued by the United States and Switzerland in an effort to encourage Swiss banks to cooperate with the DOJ‘s ongoing investigations of individuals and entities that use foreign bank accounts to commit tax evasion.  When a Swiss bank meets the conditions for participation and complies with all of the program’s requirements, the bank will be eligible to resolve potential criminal liabilities with the United States through the execution of a non-prosecution agreement.   

Swiss banks that met the program’s eligibility conditions were required to notify the Department of Justice by December 13, 2013, that they had reason to believe they had committed a criminal offense involving U.S. related offshore or foreign financial accounts. Banks that were already the target of a criminal investigation were not eligible to participate in the Swiss Bank Program.  

BSI SA (“BSI”) of Lugano Switzerland was the first Category 2 bank to reach a resolution with the United States under the Swiss Bank Program.  The BSI non-prosecution agreement, which was executed on March 30, 2015, provided for BSI to pay a $211 million penalty to the U.S. Department of Justice (DOJ) in return for the DOJ’s agreement not to prosecute BSI for tax-related criminal offenses.  The terms of the NPA also required BSI to cooperate with any related civil or criminal proceedings and to demonstrate the adoption of procedures to stop misconduct related to undeclared U.S. bank accounts.    

BSI’s $211 million penalty represents the largest penalty issued under the Swiss Bank Program.  According to the DOJ’s list of executed NPAs, the ten largest penalties to date each exceed $10 million: 

  1. BSI SA - $211,000,000
  2. BNP Paribas (Suisse) SA - $59,783,000
  3. Deutsche Bank (Suisse) SA - $31,026,000
  4. EFG Bank European Financial Group SA, Geneva, and EFG Bank AG - $29,988,000
  5. Maerki Baumann & Co. AG - $23,920,000
  6. KBL (Switzerland) Ltd. - $18,792,00
  7. Société Générale Private Banking (Suisse) SA - $17,807,000
  8. Piguet Galland & Cie SA- $15,365,000
  9. Migros Bank AG - $15,037,000
  10. Rothschild Bank AG - $11,510,000

The Swiss Bank Program has created a strong incentive for Swiss financial institutions to voluntarily turn over detailed information about their account holders in order to protect themselves from the threat of a criminal case.  If you have questions about an undeclared offshore account or are concerned that your bank has provided your account information to U.S. authorities, you need to speak with an experienced Maryland tax lawyer now.  Contact Kevin E. Thorn at the Maryland offices of Thorn Law Group to discuss your situation.

 


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