U.S., Switzerland forge bank settlement deal amid tax probe

Thu Aug 29, 2013 6:36pm EDT
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By Patrick Temple-West

WASHINGTON (Reuters) - The U.S. Justice Department said on Thursday it had signed an agreement with the Swiss government to allow some Swiss banks to avoid or defer prosecution stemming from a long-running probe of tax dodging by Americans using Swiss bank accounts.

The settlement program will apply to about 100 second-tier Swiss banks, provided they agree to disclose certain previous hidden assets of U.S. customers. It will be open only to banks not already under U.S. criminal investigation.

The deal is a step forward in a three-year U.S. effort to pierce the shroud of Swiss bank secrecy, but some details of the program raise questions about its potential for rooting out U.S. tax evaders, tax lawyers and watchdog groups said on Thursday.

Under the program, eligible banks would pay penalties and disclose account information about U.S. customers in order to avoid prosecution, the department said in a statement.

"The program's requirement that Swiss banks provide detailed account information will improve our ability to bring tax dollars back to the U.S. Treasury from across the globe," Attorney General Eric Holder said in a statement.

Fourteen Swiss banks already under investigation by U.S. prosecutors are excluded from the program, the Justice Department said. The program is not available to individuals.

Some critics of the Justice Department's previous tax crackdown efforts welcomed the settlement program.

"On the whole it's a pretty strong agreement," said Heather Lowe, director of government affairs at anti-graft watchdog Global Financial Integrity.   Continued...

U.S. Attorney General Eric Holder gestures as he exits after speaking at the annual meeting of the American Bar Association in San Francisco, California August 12, 2013. REUTERS/Stephen Lam