LONDON - Valiant Bank, a small Swiss bank, became the first in Switzerland to say that it would sign up to a deal with the United States aimed at ending a three-year tax evasion dispute with Switzerland.
Valiant, a retail bank that offers private banking services, said late on Monday that its management had decided to take part in the deal, which was struck by American and Swiss authorities in August. The bank said it hoped to gain “legal certainty and to ensure a fast and sustainable settlement.â€
The bank, which has 400,000 clients of which fewer than 400 are Americans, said the costs of participating in the program would “not jeopardize the financial stability of Valiant in any way.â€
Switzerland’s remaining 300 banks, which are currently not under investigation, have until the end of the year to sign up to the program.
In an attempt to end a dispute with the United States over whether Swiss banks helped wealthy Americans evade taxes, Switzerland agreed to a plan that would effectively end the status of the country as a tax haven for Americans. Under the agreement, which was the subject of several contentious debates among Swiss lawmakers, banks that helped wealthy Americans hide money from United States tax authorities in offshore accounts would be punished and required to disclose information about the account holders.
Switzerland agreed to the deal to put an end to uncertainty about future legal action by the United States against Swiss banks, which some lawmakers said could threaten the stability of some of Switzerland’s financial institutions. After UBS, Switzerland’s biggest bank, agreed to pay $780 million and disclose the names of 19,000 clients in 2009 to settle United States claims that the bank had helped wealthy Americans evade taxes, fourteen other banks, including Credit Suisse remain under investigation.
When signing up to the program, each bank has to clarify whether it belongs to category two or three. Banks already under investigation fall into category one. Category two banks believe they may have breached United States tax laws, in which case the banks would face fines but would be able to seek nonprosecution agreements with the United States. Category three banks have proof they did not breach any American tax rules.
Valiant said it decided to sign up to the program under category two even though it has never actively solicited American clients or visited clients in the United States. But the bank said it could not rule out that individual clients had failed to declare their assets properly. Some analysts expect most of the banks to sign up to that category to avoid future prosecution.
