Switzerland's efforts to settle a
long-standing tax evasion dispute with the United States hit a
roadblock Tuesday when the lower chamber of the Swiss parliament
rejected a government bill that would help solve the matter.
The new law lays the groundwork for banks to reach settlements with US authorities by softening banking secrecy rules so Swiss banks can provide information about past efforts aiding tax-evading US clients, such as setting up foreign accounts.
Opponents said such a deal with the United States could invite other countries to seek similar agreements.
According to the plan that the Swiss and US governments agreed to in May, the banks would also conclude individual legal settlements with the United States that would entail fines but no criminal prosecution.
But legislators in the National Council also criticized the government for not telling them what fines Swiss banks faced.
Swiss President and Finance Minister Eveline Widmer-Schlumpf warned that some banks might have to close down because of legal troubles in the US.
Companies indicted in the US can no longer do business with others and are cut off from buying and selling dollars, according to US law.
"Don't come to us in two months time and ask the state to take action," she told the legislators.
Banking contributes more than 9 per cent to the Swiss economy.
Fourteen Swiss banks, including Credit Suisse, face charges in the US if they do not settle under the proposed deal.
"The bill remains the best solution to achieve legal security so that (our) banks can make use of this US programme," said Swiss Bankers Association spokesman Thomas Sutter.
The parliamentary vote could theoretically be overturned in a second vote in the lower chamber after the matter has been considered by the upper chamber.
However, such an outcome seemed unlikely, given the entrenched positions on display on Tuesday.
The Social Democratic Party, Liberals and far-right People's Party voted against the bill, while the Christian Democratic Party and the Greens backed it, resulting in 126 no votes and 67 supporting ballots.
Christoph Blocher of the People's Party warned that the bill meant nothing less than capitulation to US pressure.
"Those who support the law do not have arguments, they are simply afraid," he said.
US authorities have turned up the pressure on Swiss banks in recent years by starting investigations and by arresting bank managers.
Most Popular Stories
- Apple Wants Samsung to Pay $22M for Patent Dispute Legal Bills
- NASA Fellowships, Scholarships Bring Diversity to Workforce
- Twitter Coming to Phones Without Internet
- Dish Network Leads 2013 Top 50 Advertisers List
- Networks Vie for U.S. Hispanic TV Viewers
- Ad Counts Rise in 2013 for Hispanic Magazines
- Jobs Report Brings Cheer As Unemployment Drops to Five-year Low
- Starbucks Gets Grinchy; No Gingerbread Lattes for Tampa Customers
- Entravision Initiates Quarterly Cash Dividend
- Warner Bros. Unleashes 'Hobbit: Desolation of Smaug' Merchandise