The banking arms of Swiss retail groups Migros and Coop have become the latest institutions to say they will work with United States officials in a crackdown on wealthy Americans evading taxes through hidden offshore accounts.
Banks had until Monday to inform the Swiss Financial Market Supervisory Authority (FINMA) whether they would take part in the scheme.
Migros Bank said on Wednesday that 370 of its 825,000 clients – mostly Swiss citizens residing temporarily in the US or clients with dual nationality – came under the criteria of the scheme brokered by the Swiss and US governments in August (see box).
For that reason, it had followed FINMA’s recommendations and registered in Category 2: for banks which know or suspect that they have committed tax evasion offences in the US.
By coming clean before the end of the year, these banks would avoid criminal prosecution but would be subject to big fines depending on when they opened accounts for US clients containing non-declared assets.
Migros Bank admitted on Wednesday it could not rule out that isolated clients had not fulfilled their US tax obligations in the past and that it could later switch to Category 4: for banks with very limited exposure to foreign clients.
Migros bank said it targets only the domestic Swiss market and had never offered offshore services. Documents are only printed in Switzerland’s three official languages: German, French and Italian.
Also on Wednesday, Bank Coop said it too had decided to participate in the scheme in Category 2, saying staying out of the programme was too risky.
Other smaller banking groups have also decided to sign up to the US scheme, including Valiant, Vontobel and the Bern Cantonal Bank.
Tax deal categories
Under the terms of the Swiss-US tax deal, signed in August 2013, the 300-plus banks in Switzerland will be arranged into four categories by the DoJ.
Group 1: The 14 banks already under active investigation for suspected tax evasion offences. These include UBS, Credit Suisse, Julius Bär, Pictet and the Zurich and Basel cantonal banks.
Some Swiss subsidiaries of foreign banks are also included in this list, such HSBC and Israeli bank Leumi. Switzerland’s oldest private bank, Rahn & Bodmer was the last institution to be added to the category 1 list in September.
Group 2: Those banks that know or suspect that they have committed tax evasion offences in the US. By coming clean before the end of the year, these banks would avoid criminal prosecution but would be subject to big fines (see other box).
Group 3: Banks that have US customers but believe that they, and their clients, have complied fully with US tax regulations.
Group 4: Banks with very limited exposure to foreign clients – no more than 2% of total client base are non-local.