SWISS BANKS

Get Out of Jail Free Card

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Zurich's banking headquarters won't escape scrutiny.
  • Why it matters

    Why it matters

    Swiss financial institutions may have missed an opportunity to avoid millions of francs in penalties for aiding German tax evaders.

  • Facts

    Facts

    • Nearly 40,000 German tax evaders came clean with the authorities in 2014 to avoid legal penalties. More than 100,000 have made voluntary disclosures since 2010.
    • Switzerland’s Basler Kantonalbank recently paid a €38.7 million fine to North-Rhine Westphalia in order to avoid prosecution for allegedly abetting German tax evaders.
    • The Swiss Bankers Association did not respond to an offer in 2013 to cooperate with Düsseldorf in exchange for avoiding both financial penalties and prosecution.
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  • Audio

    Audio

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Switzerland’s powerful financial institutions fear him. The German state of North-Rhine Westphalia is probably cheering him on.

Norbert Reifferscheidt leads the crack-down on tax evaders by this western German state, which has been more aggressive than any other state in Germany when it comes to going after offenders and taking the banks that helped to task.

Rumor has it that at least 30 Swiss banks are now being investigated by his office. Mr. Reifferscheidt himself won’t give away the exact number.

“There are many,” Mr. Reifferscheidt, a senior public prosecutor, told Handelsblatt. “Confidentiality is the highest precept in our work.”

His office has been in full attack mode since January. Now on the defensive, some Swiss banks have paid fines to North-Rhine Westphalia to avoid prosecution. Basler Kantonalbank paid out €38.7 million, or $43.7 million, for its alleged role in aiding and abetting German tax evaders. According to Handelsblatt’s sources, other Swiss financial institutions have also now agreed to settle with the state.

These big fines could have been avoided, however, if only Swiss banks had cooperated earlier.

At the end of 2013, tax authorities in North-Rhine Westphalia reached out to the Swiss Bankers Association, offering to wipe the slate clean in return for cooperation, Handelsblatt has learned. It was an offer that encouraged banks, their employees and the evaders themselves to come forward.

The banking association never acted on the offer. Some of its members now view that as a missed opportunity.

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