In what is being considered as a major shift from the conventional Swiss private banking model, majority of the Swiss private banks have begun paring off business with the US clients for fear of coming under the scanner of US tax authorities – reported Wall Street Journal.
The issue can be traced back to Swiss banking major UBS’ standoff with the US government agency, Internal Revenue Service (IRS). The agency wants UBS to reveal 52,000 client accounts to find out whether they are a result of a possible tax fraud, by breaching Swiss bank-secrecy laws.
Spokesmen of the Zurich-based retail bank Zürcher Kantonalbank and Basel-based Bank Sarasin & Cie, had confirmed that owing to the US pursuit of offshore funds, both the banks have stopped accepting deposits from wealthy US clients. However, some other banks like cooperative Raiffeisen Group and Migros Bank still accept funds from the US, but deployed strict measures. For instance, Raiffeisen requires power-of-attorney from a client residing outside the US, to do business with it. Similarly, Migros mandates that accounts have a correspondence address outside the US.
The US and Swiss governments are in talks on the issue, with a hearing slated for next month. The Swiss-American Chamber of Commerce in Zurich said efforts are under way to find a solution short of a blanket ban on US business, reported the newspaper.
