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Zurich's Oldest Private Bank Vows To Cooperate On US Probe

Tom Burroughes, Group Editor , 12 September 2013

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Rahn & Bodmer, a private bank describing itself as the oldest such firm in Zurich is among the 14 Swiss banks being investigated by US authorities for allegedly helping US tax evaders. One of its partners, Dr Christian Rahn, told Family Wealth Report that his firm will co-operate fully with US and Swiss authorities.

[tag|Rahn & Bodmer|]Rahn & Bodmer[/tag], a private bank describing itself as the oldest such firm in Zurich is among the 14 Swiss banks being investigated by US authorities for allegedly helping US tax evaders. One of its partners, Dr Christian Rahn, told Family Wealth Report that his firm will co-operate fully with US and Swiss authorities.

"The bank has had clients in the US in the past who did not disclose their accounts with the US authorities. The bank decided in mid-2008 to not have any more such clients and suggested that as far as existing clients were concerned, they should participate in the US voluntary disclosure program," Dr Rahn told this publication in a telephone call yesterday.

"The bank was aware that doing so meant that the authorities would learn that this was a bank with such clients. That is the reason why we are a 'group one' bank," he said, referring to the definitions recently set out in a US-Swiss agreement that classify banks in terms of whether they are at fault, or not. Category one banks are already under investigation by the US Department of Justice. (Category two banks have good reason to believe they may have broken US law; category three banks are those that believe they have not broken such rules.)

Rahn said it is unclear what the advantages are in being designated as a group one or group two bank. Other banks in Switzerland, he said, are evaluating their status in this regard.

"The bank is co-operating with Swiss and US authorities to find a long-lasting solution. Where necessary, the resources and added personnel will be used to resolve this," he added.  

Dr Rahn is among a number of fully liable general partners at the bank, founded in 1750. Others are Peter R Rahn, André M Bodmer, Martin H Bidermann and Christian R Bidermann. It employs a total of 200 people and has SFr12.5 billion of assets under management, according to its website.

Switzerland and the US in late August agreed to a deal that designed to draw a line under a prolonged tax dispute between Swiss banks and US authorities. The deal includes fines on certain categories of bank. The agreement is designed to resolve a clash between the countries that has seen a number of Swiss banks, such as UBS and Wegelin, subject to heavy penalties and in UBS’s case in 2009, hand over client data to the US in a historic breach of bank secrecy laws in Switzerland. A number of Swiss banks no longer provide offshore bank services to wealthy US clients.

The Swiss-US agreement contains three components: the joint statement between the Swiss and US governments, the unilateral US programme in which banks can participate voluntarily, and on the Swiss side, the model authorisation of 3 July, 2013, which governs banks' cooperation with the US authorities.

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