Does Credit Suisse Plea Mark the End of Swiss Bank Accounts?
The big talk of the nation’s capitol today, at least from a business perspective, is the guilty plea that Credit Suisse has entered into to resolve U.S. criminal charges. Switzerland’s second-largest bank entered the plea yesterday in federal court in Alexandria, Virginia.
The charge by prosecutors was that the company conspired for decades to help American clients evade taxes. As a result of the guilty plea, Credit Suisse will pay $2.6 billion in fines to the U.S. and New York state governments. The deal, however, allows the bank to continue operating in the U.S. and no officials are poised to lose their jobs at this point.
While the plea and penalty mark the end of an apparent array of tax controversies, some analysts have started to speculate on what the case may mean for the future.
One pundit, writing for Bloomberg suggests that Credit Suisse’s legal difficulties won’t quiet critics who accuse the administration of being too soft on law-breaking banks. At the same time, the writer says it could be another nail in the coffin of Swiss bank accounts being used as tax shelters.
As evidence, she cites the 2009 deal in which Switzerland’s UBS settled a similar legal fight by paying $780 million in fines and revealing secret accounts held by Americans. Also noted is the 2013 guilty plea by Wegelin & Co., which eventually led to the oldest Swiss bank closing and the pending closure of another Swiss bank.
There is no indication that Credit Suisse could be headed for that kind of fate. Company leaders say they see no signs that business has been negatively affected. Indeed, the bank’s shares reportedly closed up slightly today.
Despite the outcome of this one case, these kinds of issues are likely to continue to be a source of difficulties for many U.S. taxpayers for awhile to come. To meet the challenge, those in such circumstances need to be working with skilled legal professionals.
Source:Bloomberg Businessweek, “The End of the Swiss Bank Account as We Know It,” Sheelah Kolhatkar, May 20, 2014
