The Swiss government encouraged banks to join the program, announced Aug. 29. The Swiss Bankers Association criticized the program’s cost, pointing to questions such as who qualifies as a U.S. client and what assets are considered untaxed. The answers could determine how much a bank pays in penalties.

Cantonal Banks

To gain non-prosecution deals, banks must pay 20 percent of the value of accounts not disclosed to the Internal Revenue Service on Aug. 1, 2008, 30 percent for such accounts opened between then and February 2009 and 50 percent for accounts opened afterward.

Of four categories, those under criminal investigation are known as Category 1 banks, while those seeking non-prosecution agreements are Category 2 banks. Later this year, banks can tell the government if they don’t have undeclared U.S. accounts and won’t pay fines, or if they have predominantly local clients.

At least 33 announced through late December that they will join some form of the program, including 19 cantonal banks, or regional lenders typically owned by regional governments.

They include Union Bancaire Privee, the Geneva-based bank founded by Edgar de Picciotto in 1969; Edmond de Rothschild Group, the Geneva-based wealth manager owned by Baron Benjamin de Rothschild; EFG International AG, controlled by Greek billionaire Spiro Latsis and his family; and Bern-based Valiant Holding AG.

Tax Cheats

The program has provoked Swiss debate on whether the U.S. went too far in trying to pierce banking secrecy that protected American tax cheats for decades. The crackdown escalated after 2009, when the U.S. charged UBS AG, the biggest Swiss bank, with helping Americans hide $20 billion in assets.

UBS avoided prosecution by admitting it fostered tax evasion and paying $780 million. It handed over 4,700 accounts. The U.S. prosecuted 100 taxpayers, bankers, lawyers and advisers for offshore tax crimes. At least 38,000 taxpayers avoided prosecution by paying back taxes and penalties and disclosing which offshore banks and advisers helped them hide assets.

Banks seeking non-prosecution agreements must disclose the total number of U.S. accounts since 2008, their highest dollar value, and the employees who managed them. The banks also must use independent examiners to certify findings.