The legislation – known as the Federal Act on Measures to Facilitate the Resolution of the Tax Dispute between Swiss Banks and the United States – would provide for a one-year window during which the requested data could be transferred, according to Swiss finance minister Eveline Widmer-Schlumpf, who called it the best way to “restore stability” to Switzerland’s financial sector.
It is to be dealt with by both chambers of the Swiss parliament during the upcoming summer session in June, according to a statement on the website of the Swiss Confederation. The urgency was said to be due to the fact that the United States was "unprepared to wait any longer".
Client names and account deals will continue to be withheld by banks, under the agreement, but other data said to be key to tracking US tax evaders with undeclared Swiss accounts would be permitted to be exchanged.
Client identities could be obtained through formal requests made under the double taxation agreement that exists between the two countries, however.
"With the new legal basis, all banks that wish to respolve their relationship with the US authorities will be able to cooperate with the [US] Department of Justice, based on a framework specified by the DoJ, thereby enabling them to put the past to rest," the Swiss Confederation statement said.
The Swiss Bankers Association said that it was “pleased an agreement has been reached”, but said it was concerned about the fact that “no information whatsoever regarding the scheme that the US will offer the Swiss banks is available”.
It was not immediately clear how much the final bill for Switzerland’s banks will be, once all the fines and compensation resulting from the current US investigations have been paid, but some press accounts have estimated it at close to $10bn.
Latest chapter in saga
Today’s announcement is the latest in an ongoing dispute that dates back years, and which has seen more than a dozen Swiss banks come under scrutiny by US officials keen to track down Americans who have been using Swiss accounts to evade taxes. In 2009, Switzerland’s largest bank, UBS, was obliged to pay a fine of more than $750m and hand over to the US the names of more than 4,000 clients. Another Swiss bank, Wegelin & Co, announced it was to close after it pleaded guilty to helping Americans evade taxes and paying a $58m fine.
Alongside this issue Switzerland has been working with the US to agree a way for its financial institutions to comply with the Foreign Account Tax Compliance Act (FATCA). This matter is also due to come before Switzerland’s Parliament next month, although a deal has effectively been reached.
