Arquivos de fevereiro, 2012

Financial Times – February 5, 2012 4:37 pm
US tax evasion hangs over Swiss banks

By Haig Simonian in Zurich

When Boris Collardi delivers the 2011 results of Julius Baer on Monday morning, his audience will, for once, not be focused just on the financial performance of Switzerland’s biggest “pure play” private bank.

On Thursday, the same will apply to Credit Suisse, and, on Friday, Zürcher Kantonalbank (ZKB). All three are among the 11 banks identified by the US authorities investigating alleged assistance in helping Americans evade tax.

It is a list every Swiss banker wants to avoid. Last week, Wegelin, one of the 11, was formally indicted by the US – the first action of its kind.

Indictment is sometimes seen as a death knell for a company: in Wegelin’s case, its business was preserved only by a shotgun sale the previous week to Raiffeisen, a co-operative bank. Virtually overnight, the operation was renamed Notenstein, while the rump Wegelin, limited to offshore Swiss accounts for US taxpayers, and legal responsibility, remained with Wegelin’s former partners.

Only one bank reporting results this week will not be confronted with such questions. When UBSannounces results on Tuesday, executives will describe US tax matters as a problem of the past.

In February 2009, Switzerland’s biggest bank reached a $780m settlement with the US authorities after admitting employees had helped with tax evasion. Under the deal, and a linked, but separate, civil case requiring Swiss government intervention, the identities of almost 5,000 UBS clients suspected of not having declared their accounts were transferred to the US.

A string of indictments in recent months against current or former Credit Suisse, Baer and Wegelin bankers – as well as the 59-page Wegelin indictment itself – suggest UBS was far from alone in having helped Americans tax evaders.

Most gallingly of all for the US, some Swiss banks allegedly intensified their efforts after mid 2008, when UBS started withdrawing from the business as part of its efforts to placate the US authorities.

The Wegelin indictment, for example, alleges numerous ex-UBS customers (identified only by an alphabetical letter) came to Switzerland to seek alternatives. “The UBS client adviser informed Clients F and G that they must close their UBS accounts and that other US taxpayers with undeclared accounts were transferring funds to other Swiss banks, including Wegelin, the defendant,” notes the indictment.

Alongside Credit Suisse, Baer and ZKB, the US list includes Basler Kantonalbank (BKB), HSBC’s Swiss subsidiary and the Swiss subsidiaries of three Israeli banks.

Quite why any bank thought it safe to accept former UBS clients after the US probe into the latter and amid intense strains in US-Swiss relations is a mystery. Swiss officials privately show some understanding for those active before UBS was exposed, given that US legislation left loopholes for dummy corporate structures that could be created to evade tax.

But the decision to accept business after the UBS settlement is seen as incomprehensible. In the case of BKB, earlier indictments suggest such decisions were taken by managers in a largely independent Zurich office, with headquarters not really understanding the risks.

But in Wegelin’s case, even that excuse may be invalid. The indictment alleges the bank’s partners took a conscious and deliberate decision, believing they were safe, as the bank was small and had no US branches. The indictment argues they saw an opportunity not just to gain business, but also to charge high margins, given their new clients had few alternatives.

It is a decision all the banks involved, as well as the Swiss government which has found itself again unwillingly involved in a row with Washington, now rue.