ZURICH Dec 27 Lombard Odier & Cie and VP Bank
(Switzerland) on Friday became the latest Swiss banks to
say they would work with U.S. officials in a crackdown on
lenders suspected of helping wealthy Americans evade taxes
through hidden offshore accounts.
Unlisted Geneva-based Lombard Odier with 203 billion Swiss
francs ($227 billion) in client assets is the biggest
privately-held firm so far to say publicly it will take part in
a Swiss government-brokered scheme to make amends for aiding tax
The deal between the United States and Switzerland is part
of a U.S. drive to lift the veil on bank secrecy in the Alpine
country, the world's largest offshore finance centre with more
than $2 trillion in assets.
Under the deal, Swiss banks have until the end of the year
to sign up to the programme, which requires the firms to hand
out some previously hidden information and face penalties of up
to 50 percent of assets they managed on behalf of U.S. clients.
A host of smaller listed Swiss banks have come forward - now
including Liechtenstein-based VP Bank - but the majority of
Switzerland's private banks are unlisted and often family-run
firms such as Lombard Odier.
Swiss banks that sign up select which category they fall
under within the scheme. Those putting themselves in the second
category have reason to believe they may have committed tax
offences, and are eligible for a non-prosecution agreement if
they come clean and face fines.
So-called category 3 banks have not engaged in criminal
conduct or are deemed "compliant" under U.S. tax rules. They
would receive a "non-target letter", or a promise from
prosecutors they won't be charged later, and will not have to
"After a detailed analysis of the program and its
implications, the Bank has decided to take the prudent step of
signing up to category 2 within the required deadline of 31
December 2013. It reserves the right to join category 3 which
opens in the summer of 2014," Lombard Odier said in a statement.
VP Bank, which had client assets under management of 28.8
billion Swiss francs at the end of June, also said its Swiss
subsidiary was joining in category 2 but might switch to
category 3 later.
VP Bank said its financial stability would not be affected
by this decision and it expected "record solid annual results
for 2013" despite the expense related to the U.S. programme.