Many are leaving it to the last minute to tell the Swiss financial regulator whether they will participate in a US programme to settle tax evasion suspicions that could trigger large fines and force them to identify US customers suspected of using their Swiss accounts to dodge taxes.
Listed banks which participate in the programme could start telling investors from next week whether or not they have to take provisions against possible fines.
If they do not settle, individual banks and their senior staff risk criminal prosecution and, if a large number refuse to cooperate, it could hold up a future settlement for around a dozen of Switzerland’s largest banks, including Credit Suisse, Julius Baer, Pictet, and local government-backed Zuercher Kantonalbank.
Most of the 300 or so smaller banks are expected to participate but they are anxious to find out what others are doing and wrestling with the risk of giving up client confidentiality, which could put off customers.
“Probably a few dozen will risk being pursued by the US later and stay out of the current programme altogether,” said a lawyer involved in bank talks.
Despite knowing the terms of the August deal for months, many banks are going down to the wire with their decision, according to several sources involved in the talks.
The US Department of Justice and Switzerland’s financial regulator FINMA declined to comment on how many banks had so far agreed to settle.
Tax dodgers have been under pressure from governments since the financial crisis blew a hole in public purses and banks in Switzerland, the world’s biggest offshore financial centre, are also under investigation in Germany and France.
The US has so far prosecuted more than 70 taxpayers, at least two Swiss banks and more than 30 bankers, lawyers and advisers worldwide. Its hard line has prompted taxpayers to volunteer $5.5 billion in owed taxes.
In 2009 UBS, Switzerland’s largest bank, was fined $780 million and agreed to hand over the names of US clients with secret Swiss bank accounts to avoid facing criminal charges. Two Swiss private banks, Frey & Co and Wegelin, folded after US authorities targeted them over client tax evasion.