Ultimatum for US Clients of Credit Suisse
As the United States steps up its campaign against financial secrecy and offshore banking, it appears that Swiss bank Credit Suisse has offered its American customers an ultimatum.
According to the Sonntagszeitung newspaper, the bank’s US customers in Switzerland, of which there are thought to be between 2500 and 5000, were given “the option of moving their accounts to its CS Private Advisors subsidiary, which would report the accounts to the U.S. tax authorities, or writing them a cheque” (Reuters, 12 April 2009).
While it has been noted that Sonntagszeitung did not provide sources for its report, further investigation by the media suggests that the bank is taking steps to move away from the US offshore business.
This clear risk management tactic on the part of Credit Suisse, no doubt inspired by the actions of UBS AG following the inception of the US investigation, demonstrates that the US “discussions” with Switzerland over transparency are taking effect.
The question is: with Credit Suisse having off-loaded their US client base, will the banking giant be any safer from the intense scrutiny afforded to UBS? How far is the United States planning to take its transparency campaign?
Meanwhile, another lesson for Credit Suisse appeared this week from the US investigation into UBS, as US authorities saw what is believed to be its first guilty plea by a client of the bank. Robert Moran of Moran Yacht and Ship pleaded guilty to hiding “$3 million in assets in a secret account at UBS in Switzerland”.
Earlier this month Steven Michael Rubinstein, another UBS client, was charged with filing a false tax return that failed to report income and assets in a “secret Swiss bank account”. Unconfirmed accounts claim that there are around 100 other investigations of American clients of UBS that may lead to further charges.
Little doubt remains that the United States is serious in tackling tax evasion. They will be watching the results of the Credit Suisse ultimatum carefully – if only to detect those that take the cheque and “flee the scene”.
http://www.guardian.co.uk/business/2009/apr/13/credit-suisse-us-tax-avoidance
http://uk.reuters.com/article/marketsNewsUS/idUKTHO24363520090412
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