Swiss Bank Independent Examiner


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Gray's summary of the Program for Non-Prosecution Agreements or Non-Target Letters for Swiss Banks” as announced jointly by the U.S. Department of Justice and the Swiss Federal Department of Finance on August 29, 2013.

Gray International (Gray) is an international network of public accounting and consulting firms based in the U.S., Hong Kong, China and Europe. Gray was started over 10 years ago in the U.S. (via its predecessor) and took the form of Gray International in 2013 as the result of the networking of multiple independent practices and professionals.

Gray provides international accounting and compliance solutions in the U.S., Americas, Asia and Europe. Gray focuses on U.S. accounting, tax, and governmental compliance for multinational companies, investors, U.S. persons living overseas and foreign investors and companies investing in or moving to the U.S.

Gray also consults on compliance with U.S. laws for businesses and financial institutions overseas such as the Foreign Corrupt Practices Act (FCPA) and the Foreign Account Tax Compliance Act (FATCA), the IRS Offshore Voluntary Disclosure Program, and the Program for Non-Prosecution Agreements or Non-Target letters for Swiss Banks.

Grays principals, partners, and employees have served clients worldwide. Gray has offices in Geneva, Hong Kong, Seattle, Shanghai and plans to open an office in Singapore in late 2013.

Grays U.S. public accounting firm (Gray CPA, PC) is registered with the U.S. Public Company Accounting Oversight Board and is a member of the American Institute of Certified Public Accountants and the Center for Audit Quality.

For more information about us, please visit us at:

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Swiss Bank Independent Examiner

  1. 1. (SWISS BANK) INDEPENDENT EXAMINER and Summary of the “Program for Non-Prosecution Agreements or Non-Target letters for Swiss Banks” as announced on August 29, 2013 by the U.S. Department of Justice and the Swiss Federal Department of Finance International Accounting & Compliance GENEVA          |          HONG  KONG        |          SEATTLE        |          SHANGHAI        
  2. 2. LEGAL NOTICE IMPORTANT LEGAL INFORMATION PLEASE READ This  presentation  is  prepared  for  general  guidance  only,  and  does  not  constitute  the  provision  of   accounting,    legal  or  tax  advice  in  any  manner,  written  tax  advice  under  U.S.  Internal  Revenue  Service   Circular  230,  or  any  professional  advice  of  any  kind.  “Gray  International”  or  “Gray”  refers  to  Gray  CPA,  PC  (a   U.S.  CertiIied  Public  Accounting  Iirm)  and  Gray  International  Ltd  (a  Hong  Kong  Limited  Company).     The  information  provided  in  this  presentation  should  not  be  a  substitute  for  consultation  with  qualiIied   professionals  who  understand  your  situation,  as  it  will  differ  from  others.  In  addition,  when  making  any  tax   planning  or  legal  decisions  you  should  consult  with  your  own  legal,  tax,  accounting  and  other  professional   advisors.     This  presentation  has  been  provided  as  a  courtesy,  and  therefore  while  care  has  been  executed  in  the   preparation  of  this  information  Gray  CPA,  PC  (U.S.),  Gray  International,  Ltd.  and  all  of  their  afIiliates  make   no  representations  as  to  its  completeness,  accuracy  or  the  timeliness  of  the  information  and  takes  no   responsibility  to  update  this  information,  such  information  is  being  provided  without  warranty  of  any  kind.   The  U.S.  Department  of  Justice  and  the  Swiss  Federal  Department  of  Finance  has  not  reviewed  this   document,  does  not  endorse  or  in  any  other  manner  render  an  opinion  on  the  merits  of  Gray’s  offering  of   independent  examiner  services,  and  any  representation  to  the  contrary  is  unlawful.     For  more  information  about  us,  please  visit  us  at       ©  2013  Gray  CPA,  PC  and  Gray  International  Ltd.  with  all  rights  reserved,  this  document  shall  not  be  reproduced  or  distributed  without  the   express  written  permission  of  Gray  CPA,  PC  and    Gray  International,  Ltd.     International   Accounting &   Compliance  
  3. 3. WHO WE ARE OUR  PROFILE   Gray  International  (“Gray”)  is   an  international  network  of   public  accounting  and   consulting  Iirms  based  in  the   U.S.,  Hong  Kong,  China  and   Europe.  Gray  was  started  over   10  years  ago  in  the  U.S.  (via  its   predecessor)  and  took  the   form  of  Gray  International  in   2013  as  the  result  of  the   networking  of  multiple   independent  practices  and   professionals.     Gray  provides  international   accounting  and  compliance   solutions  in  the  U.S.,  Americas,   Asia  and  Europe.  Gray  focuses   on  U.S.  accounting,  tax,  and   governmental  compliance  for   multinational  companies,   investors,  U.S.  persons  living   overseas  and  foreign  investors   and  companies  investing  in  or   moving  to  the  U.S.       Gray  also  consults  on   compliance  with  U.S.  laws  for   businesses  and  Iinancial   institutions  overseas  such  as   the  Foreign  Corrupt  Practices   Act  (FCPA)  and  the  Foreign   Account  Tax  Compliance  Act   (FATCA),  the  IRS  Offshore   Voluntary  Disclosure   Program,  and  the  Program  for   Non-­‐Prosecution  Agreements   or  Non-­‐Target  letters  for   Swiss  Banks.       Gray’s  principals,  partners,   and  employees  have  served   clients  worldwide.  Gray  has   ofIices  in  Geneva,  Hong  Kong,   Seattle,  Shanghai  and  plans  to   open  an  ofIice  in  Singapore  in   late  2013.                                                                                                                               Gray’s  U.S.  public  accounting     Iirm  (Gray  CPA,  PC)  is     registered  with  the  U.S.  Public   Company  Accounting   Oversight  Board  and  is  a   member  of  the  American   Institute  of  CertiIied  Public   Accountants  and  the  Center   for  Audit  Quality.     For  more  information  about   us,  please  visit  us  at:     International   Accounting &   Compliance  
  5. 5. WHAT WE DO OUR  PRACTICE  AREAS   AUDIT  AND  ATTEST  SERVICES   INTL.  FORENSIC  ACCOUNTING   U.S.  TAX  COMPLIANCE   Our  experienced  auditors  provide   extensive  experience  auditing  public   and  private  companies  in  the   developed  and  developing  markets.       Let  us  put  our  extensive  experience   operating  in  the  U.S.,  Asia,  Europe  and   the  Americas  to  work  for  you.     Our  forensic  accounting  services  are   designed  to  providing  vigilance  before   the  fact,  reconstructing  and  tracing   records  after  the  fact,  and  preparing   for  trial  once  the  Iindings  are  made.     Our  team  of  experts  are  available  for   worldwide  engagement.   U.S.  FATCA  COMPLIANCE   INTL.  TAX  STRUCTURING   Gray  provides  extensive  U.S.  tax   compliance  solutions  to  clients   worldwide.  We  work  with  individuals,   family  ofIices,  investors,  Iinancial     institutions,  multinational  companies   and  domestic  (U.S.)  businesses.       Let  us  guide  you  through  the  maze  of   complex  U.S.  tax  compliance.     No  single  piece  of  U.S.  legislation  will   have  a  larger  impact  on  foreign   Iinancial  institutions  and   intermediaries  in  the  next  5  years  as   FATCA.       Let  us  help  you  assess  how  this  will   impact  your  organization  and  how  to   implement  a  practical,  affordable   solution.   In  today’s  global  landscape   international  tax  structuring  and   planning  has  never  been  more   important.       From  transfer  pricing,  treaty   compliance,  withholding   minimization,    estate  planning  and   domiciliation,    to  pre-­‐residency  tax   planning  Gray  is  ready  to  help  you   navigate  this  difIicult  terrain.   U.S.  FCPA  COMPLIANCE   Widespread  globalization  brings     increased  risks  of  corrupt  practices,   and  correspondingly,  an  increase  in   FCPA  enforcement,  penalties  and   prosecutions.       Let  Gray  help  you  prepare  and   implement  appropriate  controls  to   protect  your  organization  from   violations.   International   Accounting &   Compliance  
  6. 6. WHERE WE WORK GEOGRAPHIC AREAS OF EXPERIENCE Greenland   Alaska   Iceland   Canada   USA   Bahamas   Mexico   Belize   Guatemala   El  Salvador   Cuba   Honduras   Nikaragua   Dom.  Rep.   Jamaica   Venezuela   Costa  Rica   Guyana   Panama   Columbia   Suriname   Fr.  Guyana   Ecuador   Brazil   Peru   Norway   Sweden   Russia   Great     Germany   Belarus   Ireland   Britain     Poland   Ukraine   Kazazhstan   France   Mongolia   Romania   Uzbekistan     Kyrgysistan     Italy   North  Korea   Spain   Portugal   Turkey   Tajikistan   Japan   Greece   Syria   Turkmenistan   China   South  Korea   Tunisia   Lebanon   Iraq   Iran   Afghanistan   Morocco   Bhutan   Israel   Nepal   Qatar   Algeria   Libya   Pakistan   Saudi   Westsahara   Taiwan   Egypt   Myanmar   Arabia   U.A.E   India   Laos   Eritrea   Oman   Mauritania   Bangladesh     Mali   Niger   Vietnam    Chad   Senegal   Yemen   Sudan   Cambodia   Burkina   Guinea   Philippines   Nigeria   Thailand   Ethiopia     Sierra  Leone   C.A.R.   Kamerun     Somalia   Malaysia   Liberia   Togo   Uganda   Ghana   Cote  d‘Ivoire   Gabun   D.  R.     Kenya   Congo     Indonesia   Tanzania   R.  Congo   Angola   Bolivia   Paraguay   Finland   Namibia   Zambia   Papua  New  Guinea   Mozambique   Zimbabwe     Botswana   Madagascar   Australia   Swaziland   South  Africa   Chile   Uruguay   Argenena   Lesotho   New  Zealand   International   Accounting &   Compliance  
  7. 7. SWITZERLAND Gray  has  extensive  experience  working  in  Switzerland.  The  Firm  has  represented  both  Swiss   companies  and  individuals,  as  well  as  U.S.  taxpayers  who  have  sough  relief  under  the  U.S.  Offshore   Voluntary  Disclosure  Program  (OVDP).  The  Firm  launched  its  (Swiss  Bank)  Independent  Examiner   services  in  response  to  the  release  of  the  Program  For  Non-­‐Prosecution  Agreements  or  Non-­‐Target   Letters  for  Swiss  Banks,  by  and  between  the  U.S.  Department  of  Justice  and  Swiss  Federal   Department  of  Finance,  on  August  29,  2013.     The  Firm  has  a  depth  of  relationships  in  Switzerland,  and  has  extensive  experience  operating  under   both  Swiss  law  and  in  compliance  with  U.S.  laws  and  regulations  (both  tax  and  securities).  The  Firm   is  committed  to  Switzerland,  and  as  a  result  Switzerland  is  one  of  our  key  markets.       The  Firm  focuses  on  the  following  key  practice  areas  in  Switzerland:       (SWISS  BANK)  INDEPENDENT  EXAMINER   FATCA  IMPLEMENTATIONS       U.S.  TAX  OPINIONS   PFIC  REPORTING/COMPLIANCE   OFFSHORE  VOLUNTARY  DISCLOSURES   International   Accounting &   Compliance  
  8. 8. THE U.S. DOJ / SWISS PROGRAM     AN OVERVIEW International   Accounting &   Compliance  
  9. 9. THE PROGRAM   The  “Program  for  Non-­‐Prosecution  Agreements  or  Non-­‐Target  Letters  for  Swiss  Banks”  as  announced   jointly  by  the  United  States  Department  of  Justice  (the  “DOJ”)  and  the  Swiss  Federal  Department  of   Finance  on  August  29,  2013  (  “the  Program”)  is  open  to  every  Swiss  Bank  that  is  not  currently  under   investigation  by  the  DOJ  (further  deIined  as  Category  1  Banks).  The  Program  provides  a  mechanism  for   banks  to  resolve  past  U.S.  cross-­‐border  regulatory  exposure,  deIine  their  potential  exposure,  and   mitigate  penalties  (if  their  U.S.  account  holders  duly  disclose  the  existence  of  the  account(s)  under  an   Offshore  Voluntary  Disclosure  after  the  bank  has  notiIied  the  client  of  such  program).       Compliance  with  the  Program  should  result  in  the  avoidance  of  prosecution  by  the  DOJ.         The  key  features  of  the  program  are  as  follows:   •  Category  1  Banks  (the  14  banks  that  are  already  under  investigation  by  the  DOJ)  are  not   eligible  to  participate  in  the  program.   •  Category  2  Banks  will  pay  a  penalty  and  may  request  a  Non-­‐Prosecution  Agreement   (“NPA”)  from  the  DOJ.     •  •    Category  3  and  4  Banks  will  be  able  to  prove  compliance  with  U.S.  laws  (i.e.  prove  their   innocence)  and  will  obtain  a  Non-­‐Target  Letter  (“NTL”)  from  the  DOJ  and  will  not  pay   penalties.   Mutual  undertaking:  The  Program  is    mutual  understanding  between  the  Swiss  and  U.S.   Government,  the  Swiss  State  Secretariat  for  International  Financial  Matters  (“SIF”)  has   released  a  Circular  Letter  on  July  3,  213  which  outlines  the  terms  under  which  Swiss  Banks  are   allowed  to  co-­‐operate  in  the  Program.   International   Accounting &   Compliance  
  10. 10. CATEGORY 2 BANK   A  Category  2  Bank  is  any  Swiss  bank:     •  As  to  which  the  DOJ  has  not  authorized  a  formal  criminal   investigation  concerning  its  operations  as  of  August  29,  2013  (i.e.  that   is  not  a  Category  1  Bank);   •  that  is  not  a  Category  4  Bank;  and   •  that  has  reason  to  believe  it  may  have  committed  tax-­‐related  offenses   under  Titles  18  or  26,  United  States  Code,  or  monetary  transactions   offenses  under  §  §  5314  or  5322,  Title  31,  United  States  Code,  in   connection  with  undeclared  U.S.  Related  Accounts  held  by  the  Swiss   Bank  during  the  Applicable  Period;     •  which  may  request  a  Non-­‐Prosecution  Agreement  on  the  terms  set   out  in  the  Program.     International   Accounting &   Compliance  
  11. 11. CATEGORY 3 BANK   A  Category  3  Bank  is  any  Swiss  bank:     •  As  to  which  the  DOJ  has  not  authorized  a  formal  criminal   investigation  concerning  its  operations  as  of  August  29,  2013  (i.e.  that   is  not  a  Category  1  Bank);   •  that  is  not  a  Category  4  Bank;  and   •  that  not  committed  any  tax-­‐related  offenses  under  Titles  18  or  26,   United  States  Code,  or  monetary  transactions  offenses  under  §  §  5314   or  5322,  Title  31,  United  States  Code,  in  connection  with  undeclared   U.S.  Related  Accounts  held  by  the  Swiss  Bank  during  the  Applicable   Period  (i.e.  that  is  not  a  Category  2  Bank);   •  may  request  a  Non-­‐Target  Letter  on  the  terms  set  out  in  the   Program.     International   Accounting &   Compliance  
  12. 12. CATEGORY 4 BANK   A  Category  4  Bank  is  any  Swiss  bank:     •  As  to  which  the  DOJ  has  not  authorized  a  formal  criminal   investigation  concerning  its  operations  as  of  August  29,  2013  (i.e.  that   is  not  a  Category  1  Bank);   •  that  is  “Deemed  Compliant  Financial  Institution”  as  a  “Financial   Institution  with  Local  Client  Base”  under  the  FATCA  Agreement,   Annex  II  Paragraph  II.A.1,  as  if  the  FATCA  Agreement  were  in  force   during  the  Applicable  Period  (except  that  the  Swiss  Bank  must  meet   the  terms  of  Annex  II,  Paragraph  II.A.1.e  on  December  31,  2009,  and   the  date  of  the  announcement  of  this  Program);   •  may  request  a  Non-­‐Target  Letter  on  the  terms  set  out  in  the   Program.     International   Accounting &   Compliance  
  13. 13.   THE  PROGRAM  –  CATEGORY  2  BANKS     International   Accounting &   Compliance  
  14. 14. REQUESTING THE NPA   Each  Swiss  Bank  requesting  an  NPA  must  provide  a  letter  to  the  DOJ  (Tax  Division),  expressing  its  intent,  no   later  than  December  31,  2013.  The  letter  must:       •  Include  a  plan  for  complying  with  the  requirements  set  forth  in  the  Program,  within  a  reasonable  time,   but  not  to  exceed  120  days  from  the  date  of  the  letter  of  intent;   •  provide  the  identity  and  qualiIications  of  the  Independent  Examiner;   •  state  that  the  Swiss  Bank  will  maintain  all  records  required  for  compliance  with  the  terms  of  an  NPA   as  set  out  in  the  Program,  including  all  records  that  may  be  sought  by  treaty  requests;  and   •  state  that  the  Swiss  Bank  agrees  that  with  respect  to  any  applicable  statue  of  limitations  that  has  not   expired  as  of  the  date  of  the  announcement  of  this  Program,  the  Bank  waives  any  potential  defense   based  on  the  statute  of  limitations  for  the  period  from  the  date  of  the  announcement  of  the  Program  to   the  issuance  of  an  NPA  or  a  DPA  (deferred  prosecution  agreement).   •  Note:  If  the  Bank  is  not  able  to  comply  with  the  requirements  set  out  in  the  Program  within  120  days   from  the  date  of  the  letter  of  intent,  the  DOJ  will  grant  a  one-­‐time  extension  of  60  days  upon  a  showing   of  good  cause.   •  If  the  DOJ  concludes  that  a  Swiss  Bank  has  met  all  obligations  set  forth  in  the  NPA,  the  Department  will   not  prosecute  the  Swiss  Bank  for  any  tax-­‐related  offenses  under  Titles  18  or  26,  United  States  Code,  or   for  any  unreported  monetary  transactions  under  §§  5314  or  5322,  Title  31,  United  States  Code,  in   connection  with  undeclared  U.S.  Related  Accounts  held  by  the  Swiss  Bank  during  the  Applicable   Period.     International   Accounting &   Compliance  
  15. 15. SUBMISSION OF EVIDENCE AND INFORMATION (PRIOR TO THE NPA)   Each  Swiss  Bank  requesting  an  NPA  must  fully  cooperate  in  the  disclosure  of  the  following  evidence  and   information  prior  to  the  execution  of  an  NPA  :       •  How  the  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  the  Swiss  Bank  attracted  and  serviced  account  holders;   •  an  in-­‐person  presentation  and  documentation,  property  translated,  supporting  the  disclosure  of  the   above  information,  as  well  as  cooperation  and  assistance  with  further  explanation  of  information  and   materials  so  presented,  upon  request,  or  production  of  additional  explanatory  materials  as  needed;   and   •  The  total  number  of  U.S.  Related  Accounts  and  the  maximum  dollar  value,  in  the  aggregate,  of  the  U.S.   Related  Accounts  that:   •  existed  on  August  1,  2008     •  were  opened  between  August  1,  2008,  and  February  28,  2009;  and     •  were  opened  after  February  28,  2009     International   Accounting &   Compliance  
  16. 16. SUBMISSION OF EVIDENCE AND INFORMATION (UPON EXECUTION OF THE NPA)   Upon  execution  of  an  NPA,  for  all  U.S.  Related  Accounts  that  were  closed  during  the  Applicable  Period,  the  Swiss   Bank  must  provide  information  including:       •  The  total  number  of  accounts;  and   •    as  to  each  account:   •  The  maximum  value,  in  dollars,  or  each  account,  during  the  Applicable  Period;     •  the  number  of  U.S.  persons  or  entities  afIiliated  or  potentially  afIiliated  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;     •  whether  it  was  held  in  the  name  of  an  individual  or  an  entity;   •  whether  it  held  U.S.  securities  at  any  time  during  the  Applicable  Period;     •  the  name  and  function  of  any  relationship  manager,  client  advisor,  asset  manager,  Iinancial   advisor,  trustee,  Iiduciary,  nominee,  attorney,  accountant,  or  other  individual  or  entity   functioning  in  a  similar  capacity  known  by  the  Bank  to  be  afIiliated  with  said  account  at  any  time   during  the  Applicable  Period;  and   •  information  concerning  the  transfer  of  funds  into  and  out  of  the  account  during  the  Applicable   Period  on  a  monthly  basis  (including,  but  not  limited  to,  cash  transfers,  transfers  though   intermediaries,  and  identiIication  of  transferring  or  transferee  Iinancial  institutions)     International   Accounting &   Compliance  
  17. 17. NPA - PENALTY STRUCTURE   Upon  execution  of  an  NPA,  the  Swiss  Bank  will  agree  to  pay  as  a  penalty:     •  For  U.S.  Related  Accounts  that  existed  on  August  1,  2007,  an  amount  equal  to  20%   of  the  maximum  aggregate  dollar  value  of  all  such  accounts  during  the  Applicable   Period;   •  for  U.S.  Related  Accounts  that  were  opened  between  August  1,  2008,  and  February   28,  2009,  an  amount  equal  to  30%  of  the  maximum  aggregate  dollar  value  of  all   such  accounts;  and     •  for  U.S.  Related  Accounts  that  were  opened  after  February  28,  2009,  an  amount   equal  to  50%  of  the  maximum  aggregate  value  of  all  such  accounts.   •  Penalty  Mitigation  Provision:  The  determination  of  the  maximum  dollar  value  of   the  aggregated  U.S.  Related  Accounts  may  be  reduced  by  the  dollar  value  of  each   account  as  to  which  the  Swiss  bank  demonstrates,  to  the  satisfaction  of  the  DOJ,   was  not  an  undeclared  account,  was  disclosed  by  the  Swiss  Bank  to  the  U.S.  IRS,  or   was  disclosed  to  the  U.S.  IRS  through  an  announced  Offshore  Voluntary  Disclosure   Program  or  Initiative  following  notiIication  by  the  Swiss  Bank  of  such  a  program  or   initiative  and  prior  to  the  execution  of  the  NPA.       International   Accounting &   Compliance  
  18. 18. CLOSURE OF ACCOUNTS AND POST NPA COMPLIANCE   Closure  of  Accounts:       The  terms  of  an  NPA  will  provide  that  the  Swiss  Bank  agrees  to  close  any  and  all  accounts  of  recalcitrant   account  holders,  as  deIined  in  Section  1471(d)(6)  of  the  U.S.  Internal  Revenue  Code  (i.e.  all  undeclared   accounts).  The  Terms  of  the  NPA  will  require  that  the  Swiss  Bank  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.       Will  not  open  undeclared  accounts:       The  terms  of  the  NPA  will  also  provide  that  the  Swiss  Bank  agrees  not  to  open  any  U.S.  Related  Accounts  except   on  conditions  that  ensure  that  the  account  will  be  declared  to  the  U.S.  and  will  be  subject  to  disclosure  by  the   Swiss  bank.     Testimony  and  Treaty  Requests:       In  addition  the  Swiss  Bank,  upon  request,  will  provide  that  for  the  testimony  of  a  competent  witness  or   information  as  needed  to  enable  the  DOJ  to  use  the  information  and  evidence  obtained  pursuant  to  the   provisions  on  the  Program  or  separate  treaty  request  in  any  criminal  or  other  proceeding;  and  will  assist  in  the   identiIication  and  translation  of  signiIicant  documents  at  the  expense  of  the  Swiss  Bank.       Records:     In  furtherance  of  these  provisions,  the  Swiss  Bank  will  maintain  all  records  related  to  its  U.S.  cross-­‐border   business  for  a  period  of  10  years  from  the  termination  date  of  the  NPA.     International   Accounting &   Compliance  
  19. 19. INDEPENDENT EXAMINER’S REPORT (NPA)   Prior  to  the  execution  of  the  NPA,  the  Swiss  Bank  will,  at  its  expense,  have  the   information  as  submitted  to  the  DOJ,  veriIied  by  an  Independent  Examiner.       The  veriIication  will  include  a  statement  that  the  Independent  Examiner  has   conIirmed  that  the  due  diligence  standards  set  forth  in  the  Program,  were   applied  in  collecting  the  information.     The  Independent  Examiner’s  report  must  be  sent  to  the  DOJ  (Tax  Division)  for   review.         International   Accounting &   Compliance  
  20. 20. FALSE OR MISLEADING INFORMATION   If  the  DOJ  determines  (in  its  sole  discretion)  that  any  information  or  evidence   provided  by  the  Swiss  Bank  is  materially  false,  incomplete,  or  misleading,  it  may   decline  to  enter  into  an  NPA.     If  after  entering  the  NPA,  the  DOJ  determines  that  the  Swiss  Bank  has  provided   materially  false,  incomplete  or  misleading  information  or  evidence,  or  has   otherwise  materially  violated  the  terms  of  the  NPA,  the  U.S.  may  pursue  any  and   all  legal  remedies  available  to  it,  including  investigating  and  instituting  criminal   charges  against  the  Swiss  Bank,  without  regard  to  any  other  provision  of  the   NPA  or  the  Program.           International   Accounting &   Compliance  
  21. 21.   THE  PROGRAM  –  CATEGORY  3  BANKS     International   Accounting &   Compliance  
  22. 22. REQUESTING THE NTL (CATEGORY 3 BANKS)   Each  Swiss  Bank  requesting  an  NTL  must  provide  a  letter  to  the  DOJ  (Tax  Division),   expressing  its  intent,  no  earlier  than  July  1,  2014  and  no  later  than  October  31,  2014.  The   letter  must:       •  Include  a  plan  for  complying  with  the  requirements  set  forth  in  the  Program,   within  a  reasonable  time,  but  not  to  exceed  120  days  from  the  date  of  the  letter  of   intent;   •  provide  the  identity  and  qualiIications  of  the  Independent  Examiner;   •  state  that  the  Swiss  Bank  will  maintain  all  records  required  for  compliance  with   the  Program;       •  state  that  the  Swiss  Bank  agrees  that  with  respect  to  any  applicable  statue  of   limitations  that  has  not  expired  as  of  the  date  of  the  announcement  of  this   Program,  the  Bank  waives  any  potential  defense  based  on  the  statute  of  limitations   for  the  period  from  the  date  of  the  announcement  of  the  Program  to  the  issuance  of   a  Non-­‐Target  Letter.     International   Accounting &   Compliance  
  23. 23. INTERNAL INVESTIGATION (CATEGORY 3 BANKS)   A  Swiss  Bank  requesting  a  NTL  must  at  its  own  expense,  engage  and  Independent   Examiner  to  conduct  an  independent  internal  investigation.     At  the  conclusion  of  the  internal  investigation  the,  Swiss  Bank  and  the  Independent   Examiner  must:         •  Verify  the  percent  of  the  Swiss  Bank’s  account  holdings  and  asset  under   management  that  are  U.S.  Related  Accounts;   •  verify  that  the  Swiss  Bank  has  an  effective    compliance  program,  accompanied  by  a   description  of  the  compliance  program;  and     •  provide  the  DOJ  with  a  report  of  the  Independent  Examiner’s  internal   investigation,  prepared  in  English,  that  includes:  (i)  a  list  of  the  witnesses,   including  titles,  interviewed  by  the  Independent  Examiner  and  a  summary  of  the   information  provided  by  each  witness;  (ii)  identiIication  of  the  Iiles  reviewed  by   the  Independent  Examiner;  (iii)  the  factual  Iindings  of  the  Independent  Examiner;   and  (iv)  the  conclusions  reached  by  the  Independent  Examiner.     International   Accounting &   Compliance  
  24. 24. CLOSURE OF ACCOUNTS AND POST NTL COMPLIANCE   Closure  of  Accounts:       The  Swiss  Bank  requesting  the  NTL  must  agree  to  close  any  and  all  accounts  of  recalcitrant  account  holders,  as   deIined  in  Section  1471(d)(6)  of  the  U.S.  Internal  Revenue  Code  (i.e.  all  undeclared  accounts)  and  shall   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.       Will  not  open  undeclared  accounts:       The  Swiss  Bank  shall  also  agree  not  to  open  any  U.S.  Related  Accounts  except  on  conditions  that  ensure  that  the   account  will  be  declared  to  the  U.S.  and  will  be  subject  to  disclosure  by  the  Swiss  bank.     Records:     The  Swiss  bank  shall  maintain  all  notes,  drafts,  correspondence,  reports,  and  other  documents  or  records   created  or  prepared  in  any  manner  by  the  Independent  Examiner,  or  reviewed  by  or  provided  to  the   Independent  Examiner,  for  a  period  of  ten  years  from  the  date  of  the  Non-­‐Target  Letter.     False  or  Misleading  Information:     If  the  DOJ  determines  (in  its  sole  discretion)  that  any  information  or  evidence  provided  by  the  Swiss  Bank  is   materially  false,  incomplete,  or  misleading,  or  Iinds  that  it  has  otherwise  materially  violated  the  terms  of  any   agreement  with  the  U.S.,  the  U.S.  may  pursue  any  and  all  legal  remedies  available  to  it,  including  investigating   and  instituting  criminal  charges  against  the  Swiss  Bank,  without  regard  to  any  other  provision  of  the  NTL  or  the   Program.       International   Accounting &   Compliance  
  25. 25. CHANGE FROM CATEGORY 3 TO CATEGORY 2   If  a  Swiss  Bank,  after  having  undertaken  an  investigation  in  a  timely  and  good  faith   manner,  belatedly  determines,  based  on  the  discovery  of  information  that  in  good  faith   could  not  have  been  discovered  previously,  that  it  should  instead  have  requested  an  NPA   as  a  Category  2  Bank,  the  DOJ  may  consider  whether  to  enter  into  discussions  with  the   Swiss  Bank  as  if  the  Swiss  Bank  had  timely  requested  an  NPA  under  the  terms  of  the   Program.       A  request  for  relief  under  this  provision  must  be  made  before  October  31,  2014.    Relief  will   be  granted  at  the  sole  discretion  of  the  DOJ,  and  only  under  extraordinary  circumstances.       Under  no  circumstances  will  such  relief  be  considered  if  the  DOJ  has  authorized  a  formal   criminal  investigation  concerning  the  operations  of  the  Swiss  bank,  or  has  received   information  concerning  wrongful  conduct  by  the  Swiss  Bank.           International   Accounting &   Compliance  
  26. 26.   THE  PROGRAM  –  CATEGORY  4  BANKS     International   Accounting &   Compliance  
  27. 27. REQUESTING THE NTL (CATEGORY 4 BANKS)   Each  Swiss  Bank  requesting  an  NTL  as  a  Category  4  Bank  must  provide  a  letter  to  the  DOJ   (Tax  Division),  expressing  its  intent,  no  earlier  than  July  1,  2014  and  no  later  than  October   31,  2014.  The  letter  must:       •  Include  a  plan  for  complying  with  the  requirements  set  forth  in  the  Program,   within  a  reasonable  time,  but  not  to  exceed  120  days  from  the  date  of  the  letter  of   intent;   •  provide  the  identity  and  qualiIications  of  the  Independent  Examiner;   •  state  that  the  Swiss  Bank  will  maintain  all  records  required  for  compliance  with   the  the  Program;       •  state  that  the  Swiss  Bank  agrees  that  with  respect  to  any  applicable  statue  of   limitations  that  has  not  expired  as  of  the  date  of  the  announcement  of  this   Program,  the  Bank  waives  any  potential  defense  based  on  the  statute  of  limitations   for  the  period  from  the  date  of  the  announcement  of  the  Program  to  the  issuance  of   a  Non-­‐Target  Letter.     International   Accounting &   Compliance  
  28. 28. INTERNAL INVESTIGATION AND EVIDENCE (CATEGORY 4 BANKS)   To  obtain  a  NTL  as  a  Category  4  Bank,  a  Swiss  bank  must:       •  Provide  veriIication  executed  by  the  Swiss  Bank  and  an  Independent  Examiner  that:     i.  It  is  not  currently  the  target  of  an  authorized  formal  criminal  investigation   concerning  its  operations  by  the  DOJ,  that  it  is  a  “Deemed  Compliant  Financial   Institution”  as  a  “Financial  Institution  with  Local  Client  Base”  under  the  FATCA   Agreement;     ii.  agree  to  maintain  records  sufIicient  to  establish  the  basis  for  veriIication  of  its   status  as  a  Category  4  Bank  for  a  period  of  ten  years  from  the  date  of  the  Non-­‐ Target  Letter;  and     iii.  agrees  that,  if  the  DOJ  determines  (in  its  sole  discretion),  determines  that  any   information  or  evidence  provided  by  the  Swiss  Bank  is  materially  false,   incomplete,  or  misleading,  or  Iinds  that  it  has  otherwise  materially  violated  the   terms  of  any  agreement  with  the  U.S.,  the  U.S.  may  pursue  any  and  all  legal   remedies  available  to  it,  including  investigating  and  instituting  criminal  charges   against  the  Swiss  Bank,  without  regard  to  any  other  provision  of  the  NTL  or  the   Program.   International   Accounting &   Compliance  
  29. 29. OTHER PROVISIONS (ALL BANKS)     •  The  DOJ  will  not  authorize  formal  criminal  investigation  of  any  additional   Swiss  banks  in  connection  with  undeclared  U.S.  Related  Accounts  held  by   the  Swiss  bank  during  the  Applicable  Period  before  January  1,  2014.   •  The  personal  data  provided  by  the  Swiss  banks  under  this  Program  will   be  used  and  disclosed  only  for  purposes  of  law  enforcement  (which  may   include  regulatory  action)  in  the  U.S.  or  as  otherwise  permitted  by  U.S.   law.     •  The  Program  is  conditioned  on  the  intention  of  Switzerland,  as  stated  in   the  Joint  Statement  between  the  U.S.  Department  of  Justice  and  the  Swiss   Federal  Department  of  Finance  dated  August  29,  2013,  to  encourage   Swiss  Banks  to  consider  participation  in  the  Program.  Should  Switzerland   fail  to  provide  or  act  to  withdraw  such  encouragement,  or  should  legal   barriers  prevent  effective  participation  by  the  Swiss  Banks  on  the  terms   set  out  in  the  Program,  the  Program  may  be  terminated.     International   Accounting &   Compliance  
  30. 30. (SWISS BANK) INDEPENDENT EXAMINER     OUR SERVICES International   Accounting &   Compliance  
  31. 31. INDEPENDENT EXAMINER SERVICES Gray  International  (via:  Gray  CPA,  PC  –  a  U.S.  CertiIied  Public  Accountant)  is  uniquely  positioned  to   provide  full  scale  Independent  Examiner  Services  in  Switzerland  and  can  handle  the  “short  notice”   demands  of  the  Program  for  all  levels  of  Swiss  Banks.         Gray  is  authorized  to  practice  in  front  of  the  U.S.  Internal  Revenue  Service,  and  is  PCAOB  registered   which  means  that  it  is  authorized  to  act  as  an  auditor  for  companies  registered  with  the  U.S.   Securities  and  Exchange  Commission.  Gray  is  a  member  of  the  American  Institute  of  CertiIied  Public   Accountants  and  the  Center  for  Audit  Quality  (U.S.).     Gray  has  a  breadth  of  experience  in  international  auditing,  compliance,  U.S.  Taxation,    U.S.  Offshore   Voluntary  Disclosures,  and  operating  in  the  Swiss  environment.       FULL  SCALE  INDEPENDENT  EXAMINER   U.S.  CPA(s)   U.S.  TAX  ATTORNEYS   U.S.  SEC  AUDITORS   EXTENSIVE  SWISS  EXPERIENCE   International   Accounting &   Compliance  
  32. 32. LEAD EXAMINER Mr.  Stobie  is  the  CEO  of  Gray  International,  Ltd  (and  Gray  CPA,  PC),  with  over  10  years  experience  practicing  as  a   certiIied  public  accountant  and  subject  matter  expert  (consulting  and  testifying).  Mr.  Stobie  specializes  in   international  taxation,  accounting  and  auditing,  anti-­‐money  laundering  and  corruption.  Mr.  Stobie  has  represented   clients  from  Mexico,  China,  Malaysia,  Hong  Kong,  Taiwan,  Singapore,  Iran,  Ghana,  the  Ivory  Coast,  Pakistan,  the   United  Arab  Emirates,  Columbia,  Canada,  Ukraine,  Switzerland,  France,  Luxembourg  and  many  other  countries.     Mr.  Stobie  has  over  13  years  experience  in  Iinance,  securities  and  private  equity  and  also  serves  as  the  Chief   Executive  OfIicer  and  Chief  Compliance  OfIicer  of  Capital  Privé  Suisse  S.A.  (registered  with  the  U.S.  SEC  and  a   member  in  good  standing  with  the  Association  Romande  de  Intermédiaries  Financiers)  a  Geneva  based  fund  sponsor   and  private  wealth  manager.  Mr.  Stobie  has  served  as  Chief  Financial  ofIicer,  Chief  Executive  OfIicer  and  Managing   Partner  for  a  myriad  of  domestic  and  international  businesses  over  the  last  decade.  Mr.  Stobie  has  extensive   experience  operating  and  investing  in  both  developing  and  developed  markets.     Mr.  Stobie  has  experience  in  M&A  Advisory,  SEC  Practice  and  Reporting,  Securities  Compliance,  Venture  Capital,   Mezzanine  Financing,  Forensic  Accounting  and  United  States  Tax.       Mr.  Stobie  is  a  CertiIied  Public  Accountant  (State  of  Texas  and  State  of  Washington),  CertiIied  Fraud  Examiner,   Chartered  Global  Management  Accountant,  and  CertiIied  in  Financial  Forensics  by  the  American  Institute  of  Public   Accountants.  Mr.  Stobie  is  a  member  of  the  Washington  Society  of  CertiIied  Public  Accountants  and  the  American   Institute  of  CertiIied  Public  Accountants.     International   Accounting &   Compliance  
  33. 33. ENGAGEMENT Gray  is  offering  its  services  as  an  independent  examiner  on  a  limited  basis  and  only  after   careful  consideration  of  the  prospective  examinee  (Swiss  Bank),  their  internal  control   structure,  their  data  systems  and  condition  of  records,  and  qualiIications  of  their  supporting   professionals.     Due  to  the  short  term  nature  of  the  Program:  Gray  will  only  consider  a  limited  number  of   engagements.  Client  acceptance  of  Category  2  Banks  will  be  conducted  in  November  and   December  of  2013,  and  for  Category  3  and  4  Banks  in  February  through  September  of  2014.     SigniIicant  preparations  must  be  made  in  order  to  ensure  a  successful  engagement,  and  as  a   result,  considerable  preparations  must  take  place  before  the  Iiling  of  the  letter  or  intent.       Contact  Gray  to  schedule  an  appointment  to  discuss  engagement  alternatives  as  soon  as   possible.   International   Accounting &   Compliance  
  34. 34. CONTACT US Gray  welcomes  your  questions,  comments  and  inquiries  and  would  like   the  opportunity  to  serve  you.   Address: U.S.  International  OfIice     (Handling  U.S.  Tax  and  Compliance  for  International  Business)     Attn:  Jeremy  Stobie,  CPA,  CFE     th  Street 10900  NE  8       Suite  1000         Bellevue,  WA  98004           Phone: +  001  425.999.3685  xt  10   Website:   E-mail:     International   Accounting &   Compliance