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Swiss Bank Secrecy Veil Falls…

On May 29th, the Swiss government proposed legislation that would permit banks to release certain information to the U.S. authorities. Under current Swiss banking secrecy laws, such actions would be prohibited. The legislation is to be rushed through the Swiss parliament in their June summer session. The freedom would ultimately allow individual settlements to be made with the U.S. and they are expected to require the banks to pay fines totaling billions of dollars.  The deal is to be rushed because: “the United States is unprepared to wait any longer with the arrangement for the past for Swiss banks.”

The proposal would allow for Swiss banks to transmit more confidential information to U.S. authorities. The banks would not be allowed to hand over client names or account details, while they could reveal a paper trail of information on their business dealings with US clients allowing prosecutors to track offenders who have undeclared assets in Switzerland.  By these revelations, the U.S. authorities are not only finding out about the “who,” but also about the “where,” the “when,” and the “how”.  This will allow for much smoother prosecution of tardy non-compliers who could bear the largest brunt of legal assault.  It should be noted that the U.S. would still have to apply for judicial assistance to get detailed confidential information.

The willingness of the banks to comply with the proposal is rooted in “safeguarding their interests” against prosecution or possible exclusion from access to the US financial center. Without the governments authorization for cooperation with US authorities, individual agreements would not guarantee future criminal investigations would be halted and the uncertainty of Switzerland as a financial center would continue.

We urge our readers to stay tuned to the upcoming legislation as it will set precedent for treatment of offending banks and lay out the penalty structure (the four tier penalty structure blog post coming soon). For those who have not yet come forward with undeclared assets in Switzerland, it seems that the grains of sand left in the hour-glass can be counted individually.  Here is more information about getting compliant.

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