Credit Suisse "Had It Coming", Says International Tax Expert Over Allegations

An international tax lawyer has blasted Credit Suisse for allegedly helping cover tax evaders' tracks.

It was recentlyreported that Credit Suisse came under fire from tax authorities as the firm's offices in London, Paris and Amsterdam were visited by local authorities concerning “client tax matters”. The bank has issued a statement and has taken out advertisements in newspapers to defend its actions and explain what is happening.

Switzerland's second-largest lender's statement came out last week amid an announcement from the Dutch office for financial crimes prosecution, which said prosecutors had launched probes in several countries after they were tipped off about millions of dollars of undeclared assets linked to accounts held with an unnamed Swiss bank.

An international tax expert has slammed the Zurich-headquartered banking giant for its alleged role in helping its clients sidestep tax authorities.

“Credit Suisse has had this coming for years, and cannot pretend it is unexpected or undeserved,” said Miles Dean, managing partner at Milestone International Tax.

“Swiss banks have been at the core of tax evasion for decades,” he continued. “Under Swiss law, tax evasion isn't a crime. Swiss bankers actively promoted Switzerland as a safe haven for illicit money and conned people into thinking their secret would be safe because bank secrecy was part of the Swiss constitution.

“That was until the Swiss came to blows with the Americas for marketing their wares in the US and actively helping US nationals evade US taxes.”

Dean, a founding partner of the firm with more than 20 years' experience in tax-related law, says that Swiss banks are not better at banking than those in other countries - “they just don't play by the rules”.

In February, a former Credit Suisse client who pleaded guilty to concealing $200 million from US tax authorities was sentenced to seven months' imprisonment and ordered to pay fines of more than $113 million.

Dan Horsky, a 71-year-old retired business school professor, stashed $220 million in secret foreign accounts for 15 years and consequently evaded more than $18 million in income and gift tax liabilities, the US Department of Justice said.

Horsky was also sentenced to a year of probation, 50 hours of community service and fined $250,000 in federal court in Alexandria, Virginia. As part of his plea agreement, he paid a penalty of $100 million to the US Treasury for failing to file, and filing false, foreign bank account reports and paid more than $13 million in taxes owed to Internal Revenue Service.

“Horsky went to great lengths to hide assets overseas in order to avoid paying his share of taxes to the IRS,” US attorney Dana Boente said in a statement.

Swiss bank secrecy laws, which in their modern form date to the 1930s, are seen as dead in terms of international banking because of the advent of cross-border data exchange agreements affecting the Alpine state and dozens of other jurisdictions. Switzerland is part of the Common Reporting Standard network of agreements by countries to swap information. The demise of bank secrecy is forcing the country's banks to find new ways to prove their value.

The attack on bank secrecy has raised concerns that privacy - seen as a legitimate requirement - is also coming under threat, and that the behaviour of some jurisdictions, notably that of the US, is hypocritical. The US has been a vocal champion of chasing after offshore Swiss accounts held by wealthy Americans, and yet the US is arguably home to an opaque jurisdiction in the form of Delaware. For more on this issue, click here.

Source: wealthbriefing

Nick Kalikajaros 2017