Switzerland’s parliament has halted a bill, that would allow Swiss banks to hand over client data to US authorities as part of a measure to crackdown on tax evaders, saying it needs to "know more" about what the deal entails.
On 29 May, the Swiss government agreed to create a legal basis that will enable its banks to settle investigations by US authorities into their role in assisting wealthy Americans in evading taxes.
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The deal could require many Swiss lenders to pay up to billions of dollars in fines to the US authorities.
The lower house in Switzerland has, however, backed a motion from the left-wing Social Democrats (SP) to put the bill on ice. But demands from the biggest party in parliament, the right-wing Swiss People’s Party (SVP), to take the bill entirely off the summer session agenda.
The move means the bill could still be debated in the coming weeks.
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By GlobalDataLegislation needed
The Swiss government has been urging the parliament to rush through the legislation this month to settle a long-running tax dispute with US authorities.
The Swiss finance department was quoted saying, "If banks were not authorised to cooperate with the US authorities, the initiation of further criminal investigations or charges concerning banking institutions could not be ruled out."
The proposed bill would not provide the names and account details of the Swiss banks’ clients but would allow the sharing of information on their behaviour.
The chairman of Credit Suisse, Urs Rohner, also warned that a long-running tax dispute over hidden Swiss bank accounts with the US could "easily escalate and spill over to rivals" if matters are not settled.
Baby steps
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 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.
Thomas Jordan told the Schweiz am Sonntag newspaper in an interview, "It is not the National Bank’s job to save banks if they are insolvent. It has a duty to contribute to the system’s stability."
