Switzerland’s Supreme Court has ruled that the government can transfer the bank records of an American client of Credit Suisse to the US tax authorities, giving a boost to the country’s efforts to end US investigations of Swiss banks.
This deal concerns clients suspected of tax dodging and followed a lengthy legal battle that challenged the original government decision to allow the transfer.
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The court rejected an appeal against a lower court’s decision that requests for such assistance were admissible in cases of suspected tax fraud.
The deal, however, may result in fines totalling up to US$10 billion and will include the transfer of all the names of Americans suspected of tax evasion.
The Swiss government has agreed that banks could seek permission to avoid US criminal charges by handing over data including on bank staff.
The Swiss government will treat US requests for information on clients as double taxation treaties.
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By GlobalDataWhile Switzerland has had long-standing bank secrecy laws, the court explained that the US request was"detailed enough to show grounds for suspecting tax fraud or similar offences and to allow the identification of the wanted persons," and"was not a fishing expedition."
The US submitted a fresh request to Switzerland last year for information on former Credit Suisse clients suspected of cheating on their US taxes, after an earlier attempt was blocked by a Swiss court.
Along with Credit Suisse, the US is formally investigating over a dozen banks including Julius Baer, the Swiss arm of Britain’s HSBC, and state-backed regional banks Zuercher and Basler.
Meanwhile, Credit Suisse has reported that it saw a US$94.1 million from a British-Swiss tax deal aimed at sweeping Swiss banks clean of undeclared money held in accounts of UK clients.
Swiss-US tax probes
On 24 June 2013, PBI reported that Credit Suisse has set to disclose the names of more of its staff to the US prosecutors, who aided wealthy American citizens to evade taxes by moving their assets abroad.
On 21 June 2013, Swiss government issued an executive order allowing its banks to pass on data to US authorities.
On June 18, the country’s lower house of parliament stalled the progress on a tax-evasion bill that would have allowed the country’s banks to share data with the US government.
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.
