Unlisted Geneva-based Lombard Odier with 203 billion Swiss francs
($227 billion) in client assets is the biggest privately-held firm
so far to say publicly it will take part in a Swiss
government-brokered scheme to make amends for aiding tax evasion.
The deal between the United States and Switzerland is part of a U.S.
drive to lift the veil on bank secrecy in the Alpine country, the
world's largest offshore finance centre with more than $2 trillion
Under the deal, Swiss banks have until the end of the year to sign
up to the program, which requires the firms to hand out some
previously hidden information and face penalties of up to 50 percent
of assets they managed on behalf of U.S. clients.
A host of smaller listed Swiss banks have come forward — now
including Liechtenstein-based VP Bank — but the majority of
Switzerland's private banks are unlisted and often family-run firms
such as Lombard Odier.
Swiss banks that sign up select which category they fall under
within the scheme. Those putting themselves in the second category
have reason to believe they may have committed tax offences, and are
eligible for a non-prosecution agreement if they come clean and face
So-called category 3 banks have not engaged in criminal conduct or
are deemed "compliant" under U.S. tax rules. They would receive a
"non-target letter," or a promise from prosecutors they won't be
charged later, and will not have to pay fines.
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"After a detailed analysis of the program and its implications, the
Bank has decided to take the prudent step of signing up to category
2 within the required deadline of 31 December 2013. It reserves the
right to join category 3 which opens in the summer of 2014," Lombard
Odier said in a statement.
VP Bank, which had client assets under management of 28.8 billion
Swiss francs at the end of June, also said its Swiss subsidiary was
joining in category 2 but might switch to category 3 later.
VP Bank said its financial stability would not be affected by this
decision and it expected "record solid annual results for 2013"
despite the expense related to the U.S. program.
(Reporting by Caroline Copley and Silke
Koltrowitz; editing by Jane Merriman and Anthony Barker)
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