WASHINGTON — A claim accusing Swatch Group Ltd. of tax evasion has been dismissed by the U.S. Department of Labor.

Former Swatch regional controllers Joseph Ede and Matthieu Phanthala filed a complaint with the Department of Labor last week, alleging that Swatch used global subsidiaries to shift revenues to countries with lower tax rates. Ede and Phanthala worked out of offices in Hong Kong and Singapore.

In a statement responding to the charges released on August 13, Swatch said the matter was a “pure employment dispute,” and that one of the men is seeking separation compensation in excess of what was stated in his contract.

Swatch also contended that, while the company takes the charges seriously, it does not fall under the jurisdiction of the Sarbanes-Oxley act, as shares of the company are not listed on a U.S. exchange.

The Labor department agreed, dismissing the case on Monday. “We dismissed the complaint on the basis that the employees involved were hired outside of the U.S., they were employed outside of the U.S. and the adverse action they are claiming took place against them outside of the U.S.,” said Al Belsky, a spokesman with the Department of Labor. “Therefore there is no jurisdiction for the Department of Labor to take up a whistle-blower complaint under Sarbanes-Oxley.”

— Kristi Ellis and Ross Tucker

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