Switzerland’s lower house of parliament has stalled the progress on a tax-evasion bill that would allow the country’s banks to share data with the US government.
By 126-67 with two abstentions, Switzerland’s National Council voted not to discuss the measure any further. It instead sent the plan back to the upper house – that had voted in favour of the potential bill last week – for reconsideration.
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The bill would allow Swiss banks to sidestep strict Swiss secrecy laws and hand over business records demanded by the US authorities, as a precondition to agreeing settlements over the role of the banks in helping rich Americans evade taxes.
A majority of opponents argued the law violated Swiss sovereignty and did not provide either enough information about possible consequences or assurances from the US to protect bank employees.
The National Council also said the planned deal between Swiss banks and the US authorities would prompt further demands by other countries.
On 29 May, the Swiss government had agreed to create a legal basis to enable its banks to settle investigations by US authorities into their role in assisting wealthy Americans in evading taxes, with the aim of settling its long running dispute with the US. The Swiss government had also been urging the parliament to rush through the legislation this month.
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By GlobalData
Kill bill
Swiss parliament’s lower house may be given a second chance to debate the law before the weekend, but a second refusal to address the bill this week would kill it and raise the prospect of the US indicting Swiss banks.
If parliament does kill the bill by refusing to debate it again, the Swiss government does have the power to approve the data transfer with an executive order, as a last resort.
Previously, a Swiss parliamentary committee rejected the proposed bill for tax data sharing with the US. The Swiss parliament also previously halted the bill saying it needs to "know more" about what the deal entails.
Probes ongoing
On 14 June, the US tax authorities, reportedly, filed a request for legal assistance to identify former American clients of Wegelin & Co, Switzerland’s oldest private bank, who are suspected of tax dodging. It is the fourth such request against a Swiss financial institute.
In January 2013, Wegelin said it would shut its doors following a US indictment on charges of helping wealthy Americans evade taxes through secret accounts, and later pleaded guilty, admitted wrong-doing, as well as paid US$58 million to US authorities.
Several Swiss banks are being targeted directly by US authorities for assisting Americans evade taxes, following a US$780 million settlement with UBS in 2009.
At the end of May, Julius Baer was ordered by the Swiss government to hand over data on US clients that will be passed on to US tax authorities. Julius Baer is, reportedly, working on providing the data.
At the end of 2012, the number of Swiss banks under investigation by the US Department of Justice (DoJ) increased to 13, including Credit Suisse, Geneva private bank Pictet and Bank Frey.
