RBS discloses new tax probe, 1K-plus U.S. job cuts

RBS discloses new tax probe, 1K plus U.S. job cutsFile photo taken in 2014 shows a branch of the Royal Bank of Scotland (RBS) in Edinburgh, Scotland.(Photo: ANDY BUCHANAN, AFP/Getty Images)The global crackdown on tax evasion expanded anew Thursday as Royal Bank of Scotland (RBS) reported a division of its private bank Coutts & Co is being probed by German authorities for allegedly helping wealthy clients hide income.The disclosure in RBS’ 2014 annual report came as the bank also said it would cut more than 1,000 jobs at its U.S. trading division. The reduction will eliminate more than half of the unit’s estimated 2,000 jobs, with the heaviest losses at a Stamford, Conn., facility, Bloomberg News reported.”A prosecuting authority in Germany is undertaking an investigation into Coutts & Co Ltd in Switzerland, and current and former employees, for alleged aiding and abetting of tax evasion by certain Coutts & Co clients,” RBS said in its annual report. “Coutts & Co is cooperating with the authority.”With the disclosure, RBS joined London-based HSBC as the latest entrants on a roster of major banks whose subsidiaries are under investigation for potentially aiding tax evasion. Authorities in France, Belgium and Argentina are examining the past activities of HSBC’s private banking unit in Switzerland.Those investigations gained new urgency earlier this month as the Washington-based International Consortium of Investigative Journalists reported that secret documents showed HSBC’s Swiss arm helped customers hide billions of dollars from global tax authorities before 2007.USA TODAYDelamaide: HSBC leak aids tax evasion probesThe mounting investigations mark a new legal assault on the renowned tradition of Switzerland banking secrecy that protected account holders from tax scrutiny. The wall of silence began to crack in 2009 when Swiss banking giant UBS agreed to a $780 million deferred-prosecution deal with U.S. investigators and acknowledged it had helped wealthy Americans evade taxes.USATODAYIRS unlocks UBS vault hiding Americans evading taxes – USATODAY.comUBS turned over account data and identifications of thousands of former U.S. clients as part of the deal. The disclosures has led to dozens of criminal convictions against Americans who failed to disclose and pay taxes on assets held in UBS accounts.Following the UBS agreement, the U.S. Department of Justice launched a program that gave other Swiss banks an opportunity to receive similar non-prosecution agreements in exchange for providing a detailed review of all accounts held by American clients.According to RBS’ annual report, Coutts opted into the program and in November gave federal investigators “evidence of the tax status of all U.S.-related account holders.”RBS said Coutts expects to resolve the U.S. investigation this year, and reported that financial provisions have been made “provision “for the estimated liability” arising from the probe.In announcing its financial results, RBS said it would trim its financial focus to 13 countries, down from the 38 where it operates now. The move led to plans for the U.S. job cuts.”We will end up with a much smaller broker dealer in the U.S. than what we’ve currently got,” bank CFO Ewen Stevenson told reporters Thursday, according to the Bloomberg News report. “We’ve got a big headquarters in Stamford that’s probably bigger than we need, so we’ll look at that in due course.”

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