The US and Swiss governments have reached an agreement on a comprehensive plan allowing Swiss banks to settle with US authorities over accounts held by US tax evaders.
A deal is expected within days, according to officials from both countries.
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The agreement could be a big step towards resolving a long-running dispute over offshore tax evasion by letting some banks voluntarily disclose wrongdoing and turn over account information on American clients, a senior Justice Department official said.
The US could collect up to US$1 billion or more in penalties from this program, the official said.
The official added that the accord will divide Swiss banks into four tiers: 14 banks under criminal investigation, those allowed to avoid prosecution by disclosing wrongdoing, those without wrongdoing to disclose; and those complying with U.S. anti-tax evasion law.
The US official has warned holders of undeclared offshore accounts to declare them immediately to the Internal Revenue Service, which has a limited amnesty program for such taxpayers.
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By GlobalDataThe Swiss Bankers Association said: "The program enables all banks in Switzerland to settle their U.S. past quickly and conclusively and creates the necessary legal certainty. As soon as the programme becomes public, each bank will analyse its situation and then make a decision on how to proceed. "
By agreeing to a settlement, Swiss officials hope to protect the country’s US$2.2 trillion international financial sector and maintain a high standard of banking secrecy while avoiding new US charges that could cripple or close additional banks.
The new deal comes after the Swiss parliament in June rejected an initial agreement, which would have temporarily lifted Switzerland’s banking secrecy, offering the banks a blanket one-year waiver to reveal details about accounts held by US citizens.
The Swiss finance ministry said that details of the program would be published once the joint statement had been signed.
