Swiss Banks Deal Near In Tax Haven Crackdown, Justice Department Says

WASHINGTON -- The U.S. and Switzerland are nearing a deal that would allow some Swiss banks to avoid prosecution for sheltering the funds of wealthy Americans seeking to dodge U.S. taxes, a senior Justice Department official said Wednesday.

The deal, to be finalized within days, would end a dispute over American investigations into Swiss banks. The deal won't include 14 Swiss banks already under criminal investigation, and only will apply to financial institutions not yet under formal probes, said the Justice Department official, who would not agree to be named because the deal isn't final.

Under the deal, Swiss banks could disclose their activity to U.S. investigators and enter a non-prosecution agreement or a deferred prosecution agreement. If the banks can prove they weren't willingly helping Americans avoid paying U.S. taxes, the Justice Department will issue them a non-target letter.

Banks that participate in the program would have to pay large penalties, starting at 20 percent of their American clients' assets and going as high as 50 percent. The U.S. expects to collect more than $1 billion in penalties under the program, which will cover the period from 2008 to 2014, the Justice Department official said.

"We believe we will get very useful law enforcement information through this program," the official said. "We expect a fair amount of motivation for the banks to come forward, and we also hope that this will cause anyone who was an account holder who has yet to come forward … to realize that they are close to out of time and need to do so now."

The Justice Department official offered some details about the program after Swiss officials announced they were nearing a detail with the U.S.

"We're getting information from a lot of sources. For people who are attempting to hide assets in overseas accounts, the world is getting smaller and smaller and our information is getting better and better, and this would be one more tool among many that we have right now," the Justice Department official said.



The Top 10 Tax Havens