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Swiss Bank Enters Non-Prosecution Agreement With DOJ

DEC. 23, 2015

Swiss Bank Enters Non-Prosecution Agreement With DOJ

DATED DEC. 23, 2015
DOCUMENT ATTRIBUTES
[Editor's Note: Full text, including exhibits .]

Olivia Radin, Esq.

 

Freshfields Bruckhaus Deringer US LLP

 

601 Lexington Avenue

 

31st Floor

 

New York, New York 10022

 

Re: Bank J. Safra Saras in SA

 

DOJ Swiss Bank Program -- Category 2

 

Non-Prosecution Agreement

 

Dear Ms. Radin:

On December 23, 2013, Bank J. Safra Sarasin SA ("Bank J. Safra Sarasin") submitted a Letter of Intent to participate in Category 2 of the Department of Justice's Program for Non-Prosecution Agreements or Non-Target Letters for Swiss Banks, as announced on August 29, 2013 (hereafter "Swiss Bank Program"). This Non-Prosecution Agreement ("Agreement") is entered into based on the representations of Bank J. Safra Sarasin in its Letter of Intent and information provided by Bank J. Safra Sarasin pursuant to the terms of the Swiss Bank Program. The Swiss Bank Program is incorporated by reference herein in its entirety in this Agreement.1 Any violation by Bank J. Safra Sarasin of the Swiss Bank Program will constitute a breach of this Agreement.

On the understandings specified below, the Department of Justice will not prosecute Bank J. Safra Sarasin for any tax-related offenses under Titles 18 or 26, United States Code, or for any monetary transaction offenses under Title 31, United States Code, Sections 5314 and 5322, in connection with undeclared U.S. Related Accounts held by Bank J. Safra Sarasin during the Applicable Period (the "conduct"). Bank J. Safra Sarasin admits, accepts, and acknowledges responsibility for the conduct set forth in the Statement of Facts attached hereto as Exhibit A and agrees not to make any public statement contradicting the Statement of Facts. This Agreement does not provide any protection against prosecution for any offenses except as set forth above, and applies only to Bank J. Safra Sarasin and does not apply to any other entities or to any individuals. Bank J. Safra Sarasin expressly understands that the protections provided under this Agreement shall not apply to any acquirer or successor entity unless and until such acquirer or successor formally adopts and executes this Agreement. Bank J. Safra Sarasin enters into this Agreement pursuant to the authority granted by its Board of Directors in the form of a Board Resolution (a copy of which is attached hereto as Exhibit B).

In recognition of the conduct described in this Agreement and in accordance with the terms of the Swiss Bank Program, Bank J. Safra Sarasin agrees to pay the sum of $85,809,000 as a penalty to the Department of Justice ("the Department"). This shall be paid directly to the United States within seven (7) days of the execution of this Agreement pursuant to payment instructions provided to Bank J. Safra Sarasin. This payment is in lieu of restitution, forfeiture, or criminal fine against Bank J. Safra Sarasin for the conduct described in this Agreement. The Department will take no further action to collect any additional criminal penalty from Bank J. Safra Sarasin with respect to the conduct described in this Agreement, unless the Tax Division determines Bank J. Safra Sarasin has materially violated the terms of this Agreement or the Swiss Bank Program as described on pages 5-6 below. Bank J. Safra Sarasin acknowledges that this penalty payment is a final payment and no portion of the payment will be refunded or returned under any circumstance, including a determination by the Tax Division that Bank J. Safra Sarasin has violated any provision of this Agreement. Bank J. Safra Sarasin agrees that it shall not file any petitions for remission, restoration, or any other assertion of ownership or request for return relating to the penalty amount or the calculation thereof, or file any other action or motion, or make any request or claim whatsoever, seeking to collaterally attack the payment or calculation of the penalty. Bank J. Safra Sarasin agrees that it shall not assist any others in filing any such claims, petitions, actions, or motions. Bank J. Safra Sarasin further agrees that no portion of the penalty that Bank J. Safra Sarasin has agreed to pay to the Department under the terms of this Agreement will serve as a basis for Bank J. Safra Sarasin to claim, assert, or apply for, either directly or indirectly, any tax deduction, any tax credit, or any other offset against any U.S. federal, state, or local tax or taxable income.

The Department enters into this Agreement based, in part, on the following Swiss Bank Program factors:

(a) Bank J. Safra Sarasin's timely, voluntary, and thorough disclosure of its conduct, including:

  • how its cross-border business for U.S. Related Accounts was structured, operated, and supervised (including internal reporting and other communications with and among management);

  • the name and function of the individuals who structured, operated, or supervised the cross-border business for U.S. Related Accounts during the Applicable Period;

  • how Bank J. Safra Sarasin attracted and serviced account holders; and

  • an in-person presentation and documentation, properly translated, supporting the disclosure of the above information and other information that was requested by the Tax Division;

 

(b) Bank J. Safra Sarasin's cooperation with the Tax Division, including conducting an internal investigation and making presentations to the Tax Division on the status and findings of the internal investigation;

(c) Bank J. Safra Sarasin's production of information about its U.S. Related Accounts, including:

  • the total number of U.S. Related Accounts and the maximum dollar value, in the aggregate, of the U.S. Related Accounts that (i) existed on August 1, 2008; (ii) were opened between August 1, 2008, and February 28, 2009; and (iii) were opened after February 28, 2009;

  • the total number of accounts that were closed during the Applicable Period; and

  • upon execution of the Agreement, as to each account that was closed during the Applicable Period, (i) the maximum value, in dollars, of each account, during the Applicable Period; (ii) the number of U.S. persons or entities affiliated or potentially affiliated with each account, and further noting the nature of the relationship to the account of each such U.S. person or entity or potential U.S. person or entity (e.g., a financial interest, beneficial interest, ownership, or signature authority, whether directly or indirectly, or other authority); (iii) whether it was held in the name of an individual or an entity; (iv) whether it held U.S. securities at any time during the Applicable Period; (v) the name and function of any relationship manager, client advisor, asset manager, financial advisor, trustee, fiduciary, nominee, attorney, accountant, or other individual or entity functioning in a similar capacity known by Bank J. Safra Sarasin to be affiliated with said account at any time during the Applicable Period; and (vi) information concerning the transfer of funds into and out of the account during the Applicable Period, including (a) whether funds were deposited or withdrawn in cash; (b) whether funds were transferred through an intermediary (including but not limited to an asset manager, financial advisor, trustee, fiduciary, nominee, attorney, accountant, or other third party functioning in a similar capacity) and the name and function of any such intermediary; (c) identification of any financial institution and domicile of any financial institution that transferred funds into or received funds from the account; and (d) identification of any country to or from which funds were transferred; and

 

(d) Bank J. Safra Sarasin's retention of a qualified independent examiner who has verified the information Bank J. Safra Sarasin disclosed pursuant to II.D.2 of the Swiss Bank Program.

Under the terms of this Agreement, Bank J. Safra Sarasin shall: (a) commit no U.S. federal offenses; and (b) truthfully and completely disclose, and continue to disclose during the term of this Agreement, consistent with applicable law and regulations, all material information described in Part II.D.1 of the Swiss Bank Program that is not protected by a valid claim of privilege or work product with respect to the activities of Bank J. Safra Sarasin, those of its parent company and its affiliates, and its officers, directors, employees, agents, consultants, and others, which information can be used for any purpose, except as otherwise limited in this Agreement.

Notwithstanding the term of this Agreement, Bank J. Safra Sarasin shall also, subject to applicable laws or regulations: (a) cooperate fully with the Department, the Internal Revenue Service, and any other federal law enforcement agency designated by the Department regarding all matters related to the conduct described in this Agreement; (b) provide all necessary information and assist the United States with the drafting of treaty requests seeking account information of U.S. Related Accounts, whether open or closed, and collect and maintain all records that are potentially responsive to such treaty requests in order to facilitate a prompt response; (c) assist the Department or any designated federal law enforcement agency in any investigation, prosecution, or civil proceeding arising out of or related to the conduct covered by this Agreement by providing logistical and technical support for any meeting, interview, federal grand jury proceeding, or any federal trial or other federal court proceeding; (d) use its best efforts promptly to secure the attendance and truthful statements or testimony of any officer, director, employee, agent, or consultant of Bank J. Safra Sarasin at any meeting or interview or before a federal grand jury or at any federal trial or other federal court proceeding regarding matters arising out of or related to the conduct covered by this Agreement; (e) provide testimony of a competent witness as needed to enable the Department and any designated federal law enforcement agency to use the information and evidence obtained pursuant to Bank J. Safra Sarasin's participation in the Swiss Bank Program; (f) provide the Department, upon request, consistent with applicable law and regulations, all information, documents, records, or other tangible evidence not protected by a valid claim of privilege or work product regarding matters arising out of or related to the conduct covered by this Agreement about which the Department or any designated federal law enforcement agency inquires, including the translation of significant documents at the expense of Bank J. Safra Sarasin; and (g) provide to any state law enforcement agency such assistance as may reasonably be requested in order to establish the basis for admission into evidence of documents already in the possession of such state law enforcement agency in connection with any state civil or criminal tax proceedings brought by such suite law enforcement agency against an individual arising out of or related to the conduct described in this Agreement.

Bank J. Safra Sarasin further agrees to undertake the following:

 

1. The Tax Division has agreed to specific dollar threshold limitations for the initial production of transaction information pursuant to Part II.D.2.b.vi of the Swiss Bank Program, and set forth in subparagraph (c) on page 3 of this Agreement. Bank J. Safra Sarasin agrees that, to the extent it has not provided complete transaction information, it will promptly provide the entirety of the transaction information upon request of the Tax Division.

2. Bank J. Safra Sarasin agrees to close as soon as practicable, and in no event later than two years from the date of this Agreement, any and all accounts of recalcitrant account holders, as defined in Section 1471(d)(6) of the Internal Revenue Code; has implemented, or will implement, procedures to prevent its employees from assisting recalcitrant account holders to engage in acts of further concealment in connection with closing any account or transferring any funds; and will not open any U.S. Related Accounts except on conditions that ensure that the account will be declared to the United States and will be subject to disclosure by Bank J. Safra Saras in.

3. Bank J. Safra Sarasin agrees to use best efforts to close as soon as practicable, and in no event later than the four-year term of this Agreement, any and all U.S. Related Accounts classified as "dormant" in accordance with applicable laws, regulations and guidelines, and will provide periodic reporting upon request of the Tax Division if unable to close any dormant accounts within that time period. Bank J. Safra Sarasin will only provide banking or securities services in connection with any such "dormant" account to the extent that such services are required pursuant to applicable laws, regulations and guidelines. If at any point contact with the account holder(s) (or other person(s) with authority over the account) is re-established, Bank J. Safra Sarasin will promptly proceed to follow the procedures described above in paragraph 2.

4. Bank J. Safra Sarasin agrees to retain all records relating to its U.S. cross-border business, including records relating to all U.S. Related Accounts closed during the Applicable Period, for a period of ten (10) years from the termination date of the this Agreement.

 

With respect to any information, testimony, documents, records or other tangible evidence provided to the Tax Division pursuant to this Agreement, the Tax Division provides notice that it may, subject to applicable law and regulations, disclose such information or materials to other domestic governmental authorities for purposes of law enforcement or regulatory action as the Tax Division, in its sole discretion, shall deem appropriate.

Bank J. Safra Sarasin's obligations under this Agreement shall continue for a period of four (4) years from the date this Agreement is fully executed. Bank J, Safra Sarasin, however, shall cooperate fully with the Department in any and all matters relating to the conduct described in this Agreement, until the date on which all civil or criminal examinations, investigations, or proceedings, including all appeals, are concluded, whether those examinations, investigations, or proceedings are concluded within the four-year term of this Agreement.

It is understood that if the Tax Division determines, in its sole discretion, that: (a) Bank J. Safra Sarasin committed any U.S. federal offenses during the term of this Agreement; (b) Bank J. Safra Sarasin or any of its representatives have given materially false, incomplete, or misleading testimony or information; (c) the misconduct extended beyond that described in the Statement of Facts or disclosed to the Tax Division pursuant to Part II.D.l of the Swiss Bank Program; or (d) Bank J. Safra Sarasin has otherwise materially violated any provision of this Agreement or the terms of the Swiss Bank Program, then (i) Bank J. Safra Sarasin shall thereafter be subject to prosecution and any applicable penalty, including restitution, forfeiture, or criminal fine, for any federal offense of which the Department has knowledge, including perjury and obstruction of justice; (ii) all statements made by Bank J. Safra Sarasin's representatives to the Tax Division or other designated law enforcement agents, including but not limited to the appended Statement of Facts, any testimony given by Bank J. Safra Sarasin's representatives before a grand jury or other tribunal whether prior to or subsequent to the signing of this Agreement, and any leads therefrom, and any documents provided to the Department, the Internal Revenue Service, or designated law enforcement authority by Bank J. Safra Sarasin shall be admissible in evidence in any criminal proceeding brought against Bank J. Safra Sarasin and relied upon as evidence to support any penalty on Bank J. Safra Sarasin; and (ii) Bank J. Safra Sarasin shall assert no claim under the United States Constitution, any statute, Rule 410 of the Federal Rules of Evidence, or any other federal rule that such statements or documents or any leads therefrom should be suppressed.

Determination of whether Bank J. Safra Sarasin has breached this Agreement and whether to pursue prosecution of Bank J. Safra Sarasin shall be in the Tax Division's sole discretion. The decision whether conduct or statements of any current director, officer or employee, or any person acting on behalf of, or at the direction of, Bank J. Safra Sarasin, will be imputed to Bank J. Safra Sarasin for the purpose of determining whether Bank J. Safra Sarasin has materially violated any provision of this Agreement shall be in the sole discretion of the Tax Division.

In the event that the Tax Division determines that Bank J. Safra Sarasin has breached this Agreement, the Tax Division agrees to provide Bank J. Safra Sarasin with written notice of such breach prior to instituting any prosecution resulting from such breach. Within thirty (30) days or receipt of such notice, Bank J. Safra Sarasin may respond to the Tax Division in writing to explain the nature and circumstances of such breach, as well as the actions that Bank J. Safra Sarasin has taken to address and remediate the situation, which explanation the Tax Division shall consider in determining whether to pursue prosecution of Bank J. Safra Sarasin.

In addition, any prosecution for any offense referred to on page 1 of this Agreement that is not time-barred by the applicable statute of limitations on the date of the announcement of the Swiss Bank Program (August 29, 2013) may be commenced against Bank J. Safra Sarasin, notwithstanding the expiration of the statute of limitations between such date and the commencement of such prosecution. For any such prosecutions, Bank J. Safra Sarasin waives any defenses premised upon the expiration of the statute of limitations, as well as any constitutional, statutory, or other claim concerning pre-indictment delay and agrees that such waiver is knowing, voluntary, and in express reliance upon the advice of Bank J. Safra Sarasin's counsel.

It is understood that the terms of this Agreement do not bind any other federal, state, or local prosecuting authorities other than the Department. If requested by Bank J. Safra Sarasin, the Tax Division will, however, bring the cooperation of Bank J. Safra Sarasin to the attention of such other prosecuting offices or regulatory agencies.

It is further understood that this Agreement and the Statement of Facts attached hereto may be disclosed to the public by the Department and Bank J. Safra Sarasin consistent with Part V.B of the Swiss Bank Program.

This Agreement supersedes all prior understandings, promises and/or conditions between the Department and Bank J. Safra Sarasin. No additional promises, agreements, and conditions have been entered into other than those set forth in this Agreement and none will be entered into unless in writing and signed by both parties.

UNITED STATES DEPARTMENT OF JUSTICE TAX DIVISION

Caroline D. Ciraolo

 

Acting Assistant Attorney General

 

Date 12/23/2015
Thomas J. Sawyer

 

Senior Counsel for International

 

Tax Matters

 

Date 12/23/2015
John E. Sullivan

 

Senior Litigation Counsel

 

Date 12/23/2015
Thomas G. Voracek

 

Trial Attorney

 

Date 12/23/2015

Agreed And Consented To:

 

Bank J. Safra Sarasin SA

 

Stephane Astruc

 

General Counsel

 

Bank J. Safra Sarasin SA

 

Date 12/23/2015

APPROVED:

Olivia Radin, Esq.

 

Freshfields Bruckhaus

 

Deringer US LLP

 

Counsel for Bank J. Safra

 

Sarasin SA

 

Date 12/22/2015

 

FOOTNOTE

 

 

1 Capitalized terms shall have the meaning ascribed to them in the Swiss Bank Program.

 

END OF FOOTNOTE
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