Swiss bank Frey & Co. AG announced in its press release it will cease operations due to market conditions and regulatory limitations that are partially connected with the tax dispute with the U.S.
The bank said due to increasingly frequent and ever stronger regulation its costs and expenditures are no longer sustainable. The statement reads that Bank Frey is financially healthy and will not be liquidated. However, it did not mention weather it would resume operations in the future.
There are fourteen Swiss banks under investigation by the U.S. Department of Justice over possible tax evasion by their American clients. These institutions will have to individually come to an agreement with U.S. authorities on the size of penalties in order to avoid prosecution for helping Americans evade taxes.
Bank Frey & Co. is a small private bank in Switzerland that has assets under management of almost 2 billion Swiss francs (1.6 billion euros). According to sources, the majority of bank’s customers are U.S. citizens. Wegelin & Co. was forced to close earlier.
Under the pressure of the EU and Washington, Burn gradually retreats from its bank secrecy. Thus, Switzerland signed the Multilateral Convention on Mutual Administrative Assistance in Tax Matters during a ceremony at the OECD on October 15, 2013. The OECD hopes Burn will soon sign an agreement on automatic exchange of data on foreign depositors.
