The Switzerland-based private banking arm of HSBC said the agreement brings the saga to a close; it stressed that it has proactively co-operated with US authorities for several years. Six years ago, the US and Switzerland announced a pact under which scores of firms paid fines and settled affairs in exchange for non-prosecution agreements. 

The Switzerland-based private banking arm of HSBC said the agreement brings the saga to a close; it stressed that it has proactively co-operated with US authorities for several years and reshaped its business operations. Six years ago, the US and Switzerland announced a pact under which scores of firms paid fines and settled affairs in exchange for non-prosecution agreements. 

HSBC Private Bank (Suisse) yesterday said that it has reached a $192.35 million settlement with the US Department of Justice to resolve an investigation into its legacy business with US clients. The Geneva-based firm has signed a three-year deferred prosecution pact covering activities that went on from at least 2000 to 2010.

The bank, part of HSBC, said its payment has been fully provisioned.

This pact adds to a mass of such DPAs signed by Swiss private banks and other financial institutions in the Alpine state with the DOJ in recent years. Swiss bank secrecy laws are, at least internationally, a dead letter. The US has led an aggressive crackdown on Swiss banks providing offshore accounts to US citizens, imposing criminal and civil penalties on the likes of UBS as far back as 2009. Some Swiss commentators, such as this academic, argue that the US has been hypocritical because states such as Delaware are at least as opaque, if not more so, than Switzerland ever was. They also worry that respect for genuine financial privacy is threatened by a too-wide assault on secrecy. 

HSBC Swiss Private Bank said that it “proactively” contacted the Justice Department a number of years before the US-Swiss Bank Program was announced in 2013 and self-reported its past activities. It said that it has cooperated extensively with US authorities, in compliance with Swiss law, to bring this investigation to a close. 

“We are pleased to resolve this legacy matter. Over the past decade we have strengthened our compliance function, enhanced our control framework and put in place a comprehensive client tax transparency policy,” Alex Classen, CEO of HSBC Private Bank (Suisse) SA, said in a statement.

“Today the Swiss subsidiary operates under new management and is focused on a smaller set of markets and clients. Based on this strong foundation, and as the longstanding US investigation comes to a close, HSBC’s Swiss subsidiary is fully focused on growing its business in a sustainable way," Classen said.

One commentator in the UK has little sympathy for Swiss firms, however, despite any hypocrisies there may be. 

“Swiss banks have been at the core of tax evasion for decades. Switzerland’s USP was bank secrecy and the fact that under Swiss law tax evasion isn't a crime,” Miles Dean, head of international tax at Andersen Tax UK, said.

"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. Any notion that Swiss banks are better at banking than other banks in other countries is simply untrue, they just don’t play by the rules,” Dean added.