The introduction of FACTA – US Foreign Account Taxation Compliance Act requires foreign financial institutions to report information regarding asset ownership by US persons. Switzerland ratified the agreement in 2012, effectively compelling their banks to establish a system to review their bank accounts and identify US customers, which then had to be disclosed to the US authorities and verified by an Independent Examiner.
The role of the Independent Examiner was to test the work conducted by the banks and their advisors in identifying US customers, and to further confirm that the identification of US clients was accurate and complete. The Swiss banks’ challenges were to find a qualified Independent Examiner who could work seamlessly with the banks and their advisors to fulfil their roles, while causing minimal disruption to normal business operations. Stroz Friedberg was appointed as Independent Examiner for several Swiss Banks.
Stroz Friedberg’s Forensic Accounting and Digital Forensics teams worked together onsite to test and evaluate the customer identification processes designed by the banks. The team met with key stakeholders to gain a high level overview of how processes were executed, including attending walkthroughs of the banks’ internal systems. A timetable was instituted to ensure completion of the report by the US authorities’ deadlines.
Our digital forensics examiners reviewed the code used by the bank to interrogate and extract data from their systems, and in some instances we re-performed this work to confirm its accuracy. Meanwhile, our Forensic Accounting experts checked the manual processes and reviewed the customer files to certify that US related accounts had been correctly identified.
Stroz Friedberg collaborated with the banks and their outside advisors to carry out our independent examination with minimal interruption to their day to day business. After quickly obtaining a good working knowledge of the banks related procedures, we presented a high quality and cost effective solution to help enable compliance with FATCA.
Additionally, a thorough and objective review was provided that allowed our clients to disclose information to the US Department of Justice (DOJ) in order to obtain a non-prosecution agreement.
Stroz Friedberg ultimately submitted a report to the DOJ detailing the banks’ procedures and undertakings to identify US customers, thereby providing the banks, their advisors, and the DOJ a reliable, independent review in accordance with FATCA.