Tax: Offshore Client Banking Investigations and Compliance

International banks are subject to increasing global regulatory focus, especially regarding the tax compliance of their clients with cross-border accounts. 

Davis Polk has substantial experience representing international banks in criminal and regulatory investigations by the SEC, DOJ, New York Department of Financial Services and other regulators relating to cross-border tax issues, as well as related civil litigation, such as shareholder derivative actions. We have also conducted internal investigations for international banks into cross-border tax compliance, including sample-testing of accounts and risk assessments of particular cross-border relationships, products and services. These matters have involved close collaboration across many of our practices, including white collar defense, tax, trusts and estates, securities, financial institutions, and investment management. 

Davis Polk has also assessed and revised the compliance policies, procedures and training programs of a number of international financial institutions, working to create, implement and test global tax compliance programs, both before and after government resolutions. We also regularly communicate and negotiate with U.S. and foreign governmental and regulatory authorities, and with independent monitors, on behalf of our clients in this area.  

For additional information, visit our White Collar and Tax Controversy pages.

Recognition

Chambers USA:

  • White Collar Defense and Criminal Investigations, Band 1
  • Tax, Band 1
  • Financial Services Regulation: Banking (Compliance), Band 1
  • “A marquee domestic and international tax practice, covering the spectrum of tax planning and controversy for its impressive multinational client base.”

Legal 500 U.S. – Tax, International, Band 1

Notable Matters

  • We represent several international financial institutions in connection with investigations by the IRS and DOJ into alleged aiding and abetting of offshore tax evasion by U.S. persons.   
  • We are advising financial institutions regarding the implications of the Panama Papers leak and steps that should be taken in anticipation of regulatory changes that have been (or might be) implemented in response. We also represent various international banking organizations in connection with domestic- and foreign-regulator inquiries into the use of offshore vehicles to evade U.S. taxes. 
  • We have advised several international banks on enhancements to their global cross-border tax policies and procedures, including onboarding, identification, and escalation of high-risk accounts, and related training. 
  • We represent an international bank in criminal and regulatory investigations in Israel, Switzerland, Luxembourg and the United States involving the DOJ, SEC, and New York Department of Financial Services, as well as regulators in Switzerland, Luxembourg and Israel, and in interactions with its Monitor. We also represent the bank in related shareholder derivative actions filed in the United States. 
  • We are advising a leading industry group of nine large international banks advocating for improvements in the rules for reporting non-U.S. bank accounts (the FBAR). 
  • We successfully represented a prominent U.K.-based financial institution that was informed, based on our presentation, that it would not be prosecuted or otherwise subject to penalties based on the specific conduct under investigation. 
  • We have represented financial institutions and professional firms in connection with grand jury investigations into tax shelters. 
  • We represent a major financial institution in connection with parallel investigations conducted by the SEC, DOJ, FINRA, OCC, Manhattan District Attorney and the Permanent Subcommittee of Investigations of the U.S. Congress into allegations regarding know-your-customer issues and the alleged use by a customer of offshore accounts to violate U.S. tax and securities laws. 
  • We frequently represent individuals making voluntary disclosures of non-U.S. bank accounts.