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Data Protection and the Swiss – DOJ Settlement Program

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The program for non-prosecution agreements for Swiss Banks is largely settled. However, in a ruling by the Swiss Courts a few weeks ago, a bank in the Canton of Ticino was prohibited from releasing the names of two Swiss attorneys who acted as proxies for American customer accounts. Further, the name of a law firm who assisted U.S. persons was also withheld.

The participating bank was in the process of complying with the Settlement Program and it intended to release the names of the lawyers and law firm as part of the disclosure process, but a suit followed to block the release of the information.  Ultimately, the Swiss court held that the names should be protected from disclosure under its laws. The Court also found that the U.S. lacks similar legislation to provide adequate data protection.

Last week, U.S. authorities have indicated that by mid-November an expanded list of banks and facilitators would be published. That list mandates a 50% penalty, as opposed to a 27.5% penalty, for U.S. persons entering the Offshore Voluntary Disclosure Program.   For those U.S. persons who have not yet come into compliance with their U.S. tax obligations, time is growing short. Please contact Jim Mastracchio with any questions regarding the IRS disclosure programs (james.mastracchio@dentons.com).