Mizrahi Tefahot Bank (TASE:MZTF) today included in its financial report for the third quarter, an update of a Swiss investigation into the bank. It stated that, in contrast to other banks which are participating in a deal between the Swiss and US governments that includes fines, the investigation into Mizrahi Tefahot Bank has been transferred directly to the US authorities.
Two years ago, the US Internal Revenue Service (IRS) opened an investigation into several Swiss banks on suspicion of helping US residents evade taxes. The investigation included the Swiss branches of Mizrahi Tefahot Bank.
"At the end of August, the Swiss branch was notified by the US authorities that it was not included in the group of banks which are eligible for inclusion in the arrangement for fines that was drawn up, because an investigation has been opened into its business, and it must provide additional statistics and information," Mizrahi Tefahot Bank said in its financial report.
The bank adds that it has already provided statistics about its business with US customers at the request of the Swiss authorities. It added that, to date, it has not received any request to provide specific information about customers, and it will respond to such a request if it receives one, but only after obtaining permission from the legal and regulatory authorities in Switzerland. The bank believes that this could take several months.
Psagot Investment House Ltd. analyst Terence Klingman said today that the announcement that the investigation had been transferred to the US authorities implies that Mizrahi Tefahot Bank could face a bigger fine in the affair. "We find it difficult to estimate the extent of future damage to Mizrahi Tefahot Bank because of the investigations by the US authorities, although attempts of other banks in the world indicate that the damage could be extensive if Mizrahi Tefahot Bank violated US regulations," he says.
Published by Globes [online], Israel business news - www.globes-online.com - on November 18, 2013
© Copyright of Globes Publisher Itonut (1983) Ltd. 2013