Raiffeisen, one of Switzerland’s largest domestic banking groups, has surprisingly announced it will declare all of its clients as tax compliant in the United States under the terms of a Swiss-US deal.
Other smaller banks have opted to declare presumed guilt despite some not knowing if they count tax cheats among their clients or not. The treaty signed by the two countries in August allows Swiss banks to avoid criminal prosecution by coming clean about their US involvement by the end of this year.
In a short statement, Raiffeisen said it would decide in the “coming months” if the bank belonged in category 3 or 4 of the programme. “The basis of the decision [to choose] one of these two categories is that Raiffeisen has not systematically or actively helped US clients to evade taxes,” the statement read.
Banks signing up to the US treaty under category 3 will signal that they are sure that all of their US clients are tax compliant. Category 4 applies to banks with at least 98% domestic clients and very little exposure to foreign markets.
Raiffeisen’s announcement was not expected as other banks have played safe and declared themselves as category 2 (guilty of harbouring US tax cheats) simply because they have struggled to interpret the exact details of the US tax deal.
The Valiant group on Monday, December 9, said it was impossible to categorise itself as 3 or 4 thanks to the vague nature of the US treaty.
“The examination of client files for US persons found that Valiant has never actively solicited US persons or visited clients in the US. Nevertheless, the possibility that individual clients have not declared their assets in compliance with tax law cannot be ruled out,” it said in a statement.
The Zurich-based Vontobel private bank meanwhile has put itself in category 3, saying that its business is “clearly” aimed only at clients who are tax-compliant.
In February of last year, the Schweiz am Sonntag newspaper claimed to have seen documents showing 218 US clients on the books of Raiffeisen branches, totaling some $60 million in assets. The bank declined to comment to swissinfo.ch on numbers of clients or their details.
The US Department of Justice has warned of grave penalties if banks try to downplay their guilt when applying for non-prosecution terms.
In 2009, UBS was forced to pay a $780 million (CHF690 million) fine while Switzerland’s oldest private bank, Wegelin, was broken up and dissolved as the US criminal courts imposed a $74 million penalty.
Several individuals at both banks have also been criminally indicted, with some accused bankers lying low in Switzerland and refusing to face the US courts.
One such banker, Raoul Weil, who at one time worked for the UBS bank, was arrested in Italy in October. The Reuters news agency reported on Friday, quoting his lawyer, that Italy had met the US extradition request. He is expected to appear in court in Florida on December 16, the agency said.
Raiffeisen is a cooperative group of largely independent retail branches dotted around more than 1,000 locations in Switzerland. The group as a whole has 3.7 million customers and manages more than CHF76 billion of their wealth.
swisinfo.ch and agencies