Swiss bank 'to close US customer accounts'
Concessions from Credit Suisse after American pressure over tax avoidance
The Swiss bank Credit Suisse is edging towards closing the accounts of thousands of American customers as tax authorities in Washington step up a campaign against offshore banking secrecy.
According to reports in the Swiss media, Credit Suisse has between 2,500 and 5,000 US clients with Sfr3bn (£1.78bn) in accounts undeclared to the Internal Revenue Service.
A Sunday paper, Sonntagszeitung, reported that customers are being given a choice of moving their money to a subsidiary, CS Private Advisers, which would declare financial details to the US authorities. Alternatively, they will be sent a cheque for the balance of their funds.
The move marks an escalation in a confrontation between the US authorities and Switzerland's age-old tradition of banking privacy.
In February, Credit Suisse's larger rival, UBS, paid a $780m (£526m) fine to settle a prosecution by the US justice department for allegedly aiding tax evasion. As part of the settlement, UBS took the highly unusual step of revealing the names of some 250 of its customers to the department.
The issue has caused tension between the US and Switzerland. The US treasury is due to begin talks this month to revise a tax treaty between the two nations and is pressing Switzerland to increase its financial transparency.
Credit Suisse declined to comment directly on its actions towards US account holders. But in a statement, the Zurich-based bank said: "Credit Suisse adheres to the highest compliance standards, applicable laws, regulations, and policies."
It continued: "We offer both domestic and international wealth management services to US clients in compliance with all applicable laws, regulations, and policies."
Prosecutors in the US have grown impatient with the tactics of offshore banks in touting for American clients. According to the justice department, UBS told its staff to use encrypted laptops and to change hotels regularly while visiting clients in the US. Unmarked envelopes were used in correspondence to avoid detection.
A former UBS banker, Bradley Birkenfeld, last year pleaded guilty to helping Americans hide their wealth and offered a series of lurid revelations. He described one incident in which he smuggled a client's diamonds across international borders in a toothpaste tube.
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