Swiss banks Lombard Odier and VP Bank sign up to U.S. tax deal
ZURICH (Reuters) - Lombard Odier & Cie and VP Bank (Switzerland) VPB.S on Friday became the latest Swiss banks to say they would work with U.S. officials in a crackdown on lenders suspected of helping wealthy Americans evade taxes through hidden offshore accounts.
Unlisted Geneva-based Lombard Odier with 203 billion Swiss francs ($227 billion) in client assets is the biggest privately-held firm so far to say publicly it will take part in a Swiss government-brokered scheme to make amends for aiding tax evasion.
The deal between the United States and Switzerland is part of a U.S. drive to lift the veil on bank secrecy in the Alpine country, the world's largest offshore finance centre with more than $2 trillion in assets.
Under the deal, Swiss banks have until the end of the year to sign up to the program, which requires the firms to hand out some previously hidden information and face penalties of up to 50 percent of assets they managed on behalf of U.S. clients.
A host of smaller listed Swiss banks have come forward - now including Liechtenstein-based VP Bank - but the majority of Switzerland's private banks are unlisted and often family-run firms such as Lombard Odier.
Swiss banks that sign up select which category they fall under within the scheme. Those putting themselves in the second category have reason to believe they may have committed tax offences, and are eligible for a non-prosecution agreement if they come clean and face fines.
So-called category 3 banks have not engaged in criminal conduct or are deemed "compliant" under U.S. tax rules. They would receive a "non-target letter", or a promise from prosecutors they won't be charged later, and will not have to pay fines.
"After a detailed analysis of the program and its implications, the Bank has decided to take the prudent step of signing up to category 2 within the required deadline of 31 December 2013. It reserves the right to join category 3 which opens in the summer of 2014," Lombard Odier said in a statement.
VP Bank, which had client assets under management of 28.8 billion Swiss francs at the end of June, also said its Swiss subsidiary was joining in category 2 but might switch to category 3 later.
VP Bank said its financial stability would not be affected by this decision and it expected "record solid annual results for 2013" despite the expense related to the U.S. program.
(Reporting by Caroline Copley and Silke Koltrowitz; Editing by Jane Merriman and Anthony Barker)
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