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When Choosing an Independent Examiner Category 2 Banks Need an Integrated Investigations Team

When Choosing an Independent Examiner Category 2 Banks Need an Integrated Investigations Team

DECEMBER 11, 2013

The Program for Non-Prosecution Agreements for Swiss banks provides a path for Category 2 banks (those with tax-related offenses in connection with undeclared U.S. related accounts held by Swiss banks) to resolve potential criminal liabilities in exchange for a non-prosecution agreement or a deferred prosecution agreement.

The joint statement between the U.S. Department of Justice (DOJ) and the Swiss Federal Department of Finance requires Category 2 banks wishing to qualify to send a letter to the DOJ waiving any statute of limitations it may have with respect to the period after August 29, 2013 and must be sent on or before December 31, 2013. The letter must include the bank’s plan for compliance and identify an Independent Examiner who will verify aspects of the plan and information provided to the DOJ.

It will be necessary for Category 2 banks to provide complete disclosure of their cross-border business with U.S. related accounts; furnish and verify by an Independent Examiner information on those accounts; present all necessary material to cooperate with treaty requests; provide assistance through testimony or information in related matters; close accounts of recalcitrant account holders who fail to comply with U.S. reporting obligations; and pay a penalty. In addition, participating banks cannot currently be the target of a criminal investigation authorized by the U.S. Department of Justice Tax Division.

Participating in the Program offers Category 2 banks the potential for non-prosecution from a variety of criminal offenses in exchange for disclosure of information concerning account holders at non-U.S. financial institutions who do not report those accounts and/or did not pay U.S. taxes on amounts associated with those accounts.

The Program requires an Independent Examiner to verify the information provided to the DOJ regarding U.S. related accounts and confirm that the due diligence standards set out by the DOJ were properly applied by the bank. When choosing an Independent Examiner, banks need professionals who offer both forensic accounting and legal services. Most importantly, suitable candidates should have extensive experience reviewing records of foreign banks; have a presence in European countries; and be capable of managing Big Data within the 120-day period of submitting the eligibility letter to the DOJ.

The Independent Examiner’s ability to gather, index, and correlate vast amounts of data quickly and efficiently in a manner that allows true knowledge to be extracted will be a key driver to and greatly impact the outcome of the investigation. Big Data solution providers backed by a team of multi-disciplinary professionals with specific expertise in forensic accounting, compliance, monitoring and complex investigations offer Category 2 banks maximum value and the assurance of meeting the stringent requirements of the DOJ within the timely deadline.

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