The US has been chasing the whereabouts of offshore assets pretty much since the advent of the financial crisis hunting for tax evasion. This is a topic we have mentioned earlier in November 2011 (see the Nov 21 entry here).
The Swiss government reached out yesterday to the US delivering an encrypted list of data of bank employees who served American clients suspected of dodging taxes. Martin Naville, head of the Swiss-American Chamber of Commerce reiterated that it is a gesture to show Swiss willingness in negotiation.
The delivery of the list met the deadline of January 30th set by US authorities and the encryption covers personnel from Credit Suisse, Julius Baer and Basler Kantonalbank. According to Swiss authorities, non-encrypted data would only be delivered upon US request under the existing double-taxation treaty and if the person accused had also broken Swiss laws. As Switzerland defends the secrecy of its banking tradition, Swiss authorities are keen to retain some control in their negotiations with the US.
Just last week on January 27th, Swiss bank Wegelin, a 270 year-old bank to the super-rich, broke up in consideration of expanding US enforcement efforts. Most Wegelin employees, along with clients and assets of CHF21 billion have been moved to Notenstein Privatbank in hope of shielding healthy non-US assets from US investigations. US assets on the other hand have been left with Wegelin, which may have to face the consequences of US action on its own. The estimated worth of such US assets is at CHF1.5 billion.
The US is still keen to chase tax evaders and we may soon be seeing other cash-strapped countries to follow suit. Swiss banks may be able to encrypt client profiles for now but perhaps not for too much longer.
The Reuters article on the encrypted list, dated 31 Jan 2012, can be accessed here.
Reuters report on the breaking up of Wegelin can be accessed here.