Switzerland and United States sign joint statement to end tax dispute between Swiss banks and United States
Bern, 30.08.2013 - On 29 August 2013, Switzerland and the United States signed a joint statement in Washington that puts an end to the prolonged tax dispute between Swiss banks and the United States. The chosen solution defines the framework for Swiss banks' cooperation with the US authorities. It respects Switzerland's legal system and sovereignty.
The joint statement was signed by the Ambassador of Switzerland in Washington, Manuel Sager, and James Cole, Deputy Attorney General in the US Department of Justice (DOJ). The US programme, the terms of which have also been published, enters into force on the date of signature of the joint statement.
The agreed solution is made up of three components: the joint statement between the Swiss and US governments, the unilateral US programme in which banks can participate voluntarily, and on the Swiss side, the model authorisation of 3 July 2013 which governs banks' cooperation with the US authorities.
This solution enables Swiss banks to resolve past issues in a clearly defined framework. It respects the Swiss legal system, does not create any retroactive regulations and does not involve emergency legislation.
Banks that decide to participate in the US programme will have to ask the Federal Council for individual authorisation in accordance with Article 271 of the Criminal Code. However, this authorisation does not apply to client data, which can be provided only within the scope of administrative assistance based on the double taxation agreement of 1996 and the protocol of 23 September 2009, once the latter enters into force.
Banks must comply with applicable Swiss law within the scope of their cooperation with the US authorities, particularly concerning data protection and employment law provisions. These principles have been expressly set out in the Federal Council's model authorisation.
The US programme is open to all Swiss banks, excluding those banks which are the target of criminal investigations by the Department of Justice (category 1). Banks in category 2 which have good reasons to believe that they have violated US tax law may request a non-prosecution agreement from the US authorities up to 31 December 2013 at the latest. They must then supply the US authorities with information on their cross-border relations, particularly leaver lists, but not the names of clients.
Institutions in category 2 must additionally pay a fine, the amount of which will be in relation to the volume of untaxed US assets they hold and the date on which the accounts were opened. The fines amount to 20% for accounts which existed on 1 August 2008, and 30% for accounts opened between 1 August 2008 and 28 February 2009. If a bank opened an account with untaxed US assets after 28 February 2009, the fine will be 50%.
Banks which believe that they have not violated US tax law (category 3) and those whose business is local in nature (category 4) can report to the US authorities between 1 July 2014 and 31 October 2014 at the latest to request a non-target letter.In its declaration of 19 June 2013, the Swiss parliament expressed its intention for the Federal Council to take all the measures at its disposal within the scope of Swiss law to allow banks to cooperate with the US Department of Justice. On 28 August, the Federal Council examined the solution proposed by the United States and gave the go-ahead for finalising the joint statement.
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Last modification 03.10.2018