World Bulletin / News Desk
The Swiss government agreed on Wednesday to create a legal basis that will allow its banks to settle investigations by U.S. authorities into their role in helping wealthy Americans evade billions of dollars in tax.
The agreement would give dozens of banks permission to reach settlements, expected to require them to pay fines totalling billions of dollars to the U.S. authorities.
Special permission will be granted to allow banks to turn over new information about the behaviour of their staff and clients, although the government said no changes would be made to rules protecting clients' identities.
After a regular cabinet meeting, the finance department said the government was proposing legislation to be rushed through parliament in the summer session in June.
"If banks were not authorised to cooperate with the U.S. authorities, the initiation of further criminal investigations or charges concerning banking institutions could not be ruled out," the department said in a statement.
The country's biggest bank UBS was forced in 2009 to pay a fine of $780 million and hand over the names of more than 4,000 clients, delivering the U.S. authorities information that allowed them to then pursue other Swiss banks.
Switzerland's long tradition of bank secrecy, which protects the identity of its clients, has seen the country become a haven for untaxed funds and the world's biggest offshore centre, with $2 trillion in assets.
But that tradition has come under heavy fire since the financial crisis as cash-strapped governments around the world have clamped down on tax evasion, with authorities probing Swiss banks in Germany and France as well as the United States.
The banks under formal U.S. investigation include Credit Suisse, Julius Baer, British bank HSBC's Swiss arm, privately-held Pictet in Geneva, and smaller players such as LLB's Swiss arm and local government-backed Zuercher Kantonalbank and Basler Kantonalbank .
The Swiss government has been negotiating with U.S. authorities for two years to try to resolve the tax dispute, but has been hamstrung by secrecy laws as well as squabbling among the country's banks as to who should pay what.
The Swiss announcement on Wednesday did not include any details of how much banks might have to pay in fines, although sources have said the total for the financial industry might amount to $10 billion.
Finance Minister Eveline Widmer-Schlumpf said the government had not discussed a total sum for fines and would not offer financial assistance for banks as they seek individual settlements.
The finance department said the bill the cabinet adopted on Wednesday would allow banks to hand over information about their employees involved in the U.S. business and patterns of client behaviour, but not identities of clients except under conditions already authorised by bilateral agreements.
Switzerland's oldest private bank, Wegelin & Co, said in January it was closing down after pleading guilty to helping Americans evade taxes, paying a fine of nearly $58 million.Last Mod: 29 Mayıs 2013, 14:25