Most Active Stories
- Get ready... here comes the next WUKY Phoenix Friday... This Friday... featuring Ben Sollee.
- Electricians Aren't Magicians, But Their Rabbits Disappear, Too
- Opening Date For Urban Outfitters, Midway Program Announcement And Country Boy On BizLexChat
- Distillery District Abuzz, Ky. Companies Cash In At Valhalla, On BizLexChat
- Picnic With The Pops To Feature Songs Of Elton John
Wed February 26, 2014
Swiss Bank Finds Itself Under American Scrutiny
Originally published on Thu February 27, 2014 12:08 pm
MELISSA BLOCK, HOST:
Top executives at one of Switzerland's biggest banks said today they're sincerely trying to prevent tax evasion by U.S. citizens. They also said conflicting laws in the two countries make it almost impossible to do that. The chief executive of Credit Suisse appeared before the Senate Permanent Subcommittee on Investigations, which has been looking into the use of secret Swiss bank accounts by Americans.
Here's NPR's Jim Zarroli.
JIM ZARROLI, BYLINE: In 2009, the subcommittee began a marathon investigation into overseas tax havens, one that eventually led to the prosecution of the Swiss bank UBS. At the time, says subcommittee Chairman Carl Levin of Michigan, it looked as though the world was ready to crack down on secret accounts.
SENATOR CARL LEVIN: Well, it's five years later and the sad truth is that the era of bank secrecy is not over. Bank secrecy has been discredited and condemned but it isn't gone.
ZARROLI: Before him sat Brady Dougan who, despite being American himself, is CEO of Credit Suisse. The subcommittee says Credit Suisse at one time had 22,000 accounts held by Americans, the vast majority of which were never disclosed to the IRS. Dougan conceded that a few rogue bankers had helped American accountholders conceal their assets. But he said the bank as a whole remains committed to complying with U.S. law.
BRADY DOUGAN: And for me personally, it has been one of my highest priorities to get this fixed, to get it right, and I believe we have made significant progress towards that goal.
ZARROLI: But Dougan and other executives pointed out that the Senate had yet to ratify what's called the Double Taxation Treaty. The agreement would establish a process enabling the U.S. to get the names of tax evaders with Swiss accounts in some cases. Until the treaty is ratified, Credit Suisse officials insisted that the bank is caught between a rock and a hard place.
General Counsel Romeo Cerutti said the bank wants to obey U.S. regulations.
ROMEO CERUTTI: This has not been easy. Given that we need to comply with the laws of both United States and Switzerland and these laws are sometimes directly conflicting.
ZARROLI: Under questioning by Arizona Senator John McCain, Cerutti says current Swiss law continues to block the release of accountholders' names in most cases.
CERUTTI: This is subject to imprisonment and fines. So...
SENATOR JOHN MCCAIN: And so, any real idea that the government of Switzerland is cooperating with us is a joke, right?
ZARROLI: Meanwhile, Senator Levin insisted that banks such as Credit Suisse are hiding behind Swiss law. If they want to do business in the United States, he said they have to comply with U.S. regulations. As for the Double Taxation Treaty, Levin said it will have at best a limited impact on curbing tax evasion. For one thing, he says it doesn't apply to accounts opened before 2009.
LEVIN: It doesn't apply to thousands of accounts of people who owe us money. And that means that we lose billions of dollars in tax collections and that's unacceptable to us.
ZARROLI: Levin and other senators also criticized the Justice Department, saying it hadn't pursued tax invaders aggressively enough. But Justice Department officials said, since 2009, they have charged 73 bank customers and 35 executives and advisors for tax evasion. And they are investigating 14 Swiss banks that could be indicted down the road.
Jim Zarroli, NPR News.
(SOUNDBITE OF MUSIC)
AUDIE CORNISH, HOST:
This is NPR News. Transcript provided by NPR, Copyright NPR.