Vontobel Holding AG, a Swiss bank and asset manager, said it doesn’t expect to pay a penalty as part of a U.S. Department of Justice client-disclosure program.
Vontobel will enter the Justice Department’s category for Swiss banks that haven’t committed tax-related offenses, the Zurich-based company said in an e-mailed statement today. Vontobel said it implemented “sustainable measures” in 2008 by moving affluent Americans to its Swiss Wealth Advisors unit, which is registered with the Securities and Exchange Commission.
“Vontobel future-proofed its business model for U.S. private clients at an early stage, and proactively implemented appropriate measures to establish a viable business model,” the bank said in the statement.
Swiss banks have been hurt as the Justice Department and the Internal Revenue Service crack down on undeclared assets abroad, prompting at least 38,000 Americans to make declarations and repatriate assets. UBS AG, Switzerland’s largest bank, settled in 2009 to avoid prosecution, while private bank Wegelin & Co. closed this year after being indicted.
The Justice Department, which is investigating 14 Swiss banks for allegedly helping clients hide money from the IRS, announced a program in August that divides the country’s financial industry into four categories. It enables firms not already being probed to apply for non-prosecution agreements, or demonstrate their innocence, by disclosing information on American customers.
Non-target Letter
Banks already under investigation, including Credit Suisse Group AG and Julius Baer Group Ltd., Switzerland’s second and third-largest wealth managers, are in category one. Those in category two must contact the Justice Department voluntarily by the end of the year and will pay a penalty unless the U.S. finds tax laws weren’t broken.
Vontobel, which told American clients in 2008 to either join the Zurich-based Swiss Wealth Advisors unit or leave the bank, will apply for a non-target letter from the Justice Department as part of the program’s category three. Category four is for local and regional banks with domestic clients.
“Vontobel is one of the banks that realized early on the U.S. would tighten scrutiny on Americans banking abroad,” said Tim Dawson, an analyst at Helvea SA in Geneva. “Putting clients into the SEC-registered unit was a smart move.”
UBS Fine
UBS paid $780 million and admitted it fostered tax evasion in 2009 to avoid U.S. prosecution. It later turned over data on about 4,700 client accounts as the Justice Department widened its probe, targeting banks that took on former clients of UBS and advisers named in declarations by U.S. taxpayers.