News Column

Swiss Give Final No to U.S. Tax Evasion Deal

June 19, 2013
tax evasion

A bill that would have allowed Swiss banks to settle a major tax evasion dispute with the United States was definitively defeated Wednesday when the lower house of the nation's parliament defeated it for the second time in two days.

The lower house had already voted the measure down Tuesday. Parliamentary procedure meant it then went back to the upper house, which approved it for a second time Wednesday morning, before it returned to the lower house.

The second defeat means the government-drafted bill fails.

The new law would have made it possible for Swiss banks to provide information about tax-evading US clients to US authorities, which they are not allowed to do under current secrecy rules.

The US has offered 14 banks a deal, under which they would share information about foreign accounts and would have to pay fines, while evading criminal prosecution.

Many legislators in the parliament in Bern have warned that other countries would ask for similar deals and criticized that the amount of the fines has been kept secret by the US.

There is a risk that the US withdraws its offer, Swiss business law scholar Peter Kunz was quoted as saying by the Swiss daily Tages-Anzeiger, while acknowledging that it was unclear what Wednesday's decision means for the 14 banks that include Credit Suisse.

"No one knows. Neither the government, nor the banks, nor parliament. The US possibly don't know, either," he said.

Swiss President and Finance Minister Eveline Widmer-Schlumpf warned Tuesday that some banks might have to close down if they are indicted, as this would results in a cut-off from the dollar currency trade and from doing business in the US.

The affected banks can now ask the Swiss government to waive the secrecy rules on a case-by-case basis, but they have no guarantee that the government will be able to grant permission to provide all the data requested by the US.

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Source: Copyright 2013 dpa Deutsche Presse-Agentur GmbH

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