The rejection of the measure means that the US may now go after a handful of Swiss banks it is currently investigating for their role in helping US taxpayers to evade paying tax.
One Swiss bank, Wegelin – which had been the country’s oldest – announced earlier this year that it would close, after pleading guilty in a New York court in January to helping Americans hide their wealth in undeclared bank accounts.
Famously impregnable laws
The rejected legislation would have relaxed Switzerland’s famously impregnable bank secrecy laws in order to allow its banks to accommodate US requests for information in connection with its tax evasion investigations, which have been ongoing since 2009. That was the year that Switzerland’s biggest bank, UBS, admitted to helping Americans to evade their US tax obligations, and agreed to turn over more than 4,450 client names and pay a $780m fine.
Yesterday’s decision to reject the draft law followed last week’s approval by Switzerland’s Senate to approve it.
As reported, that vote had been 24 to 15 in favour.Yesterday’s vote was 123 to 63 against.
In a statement posted immediately after the vote was taken, the Swiss Bankers Association expressed its regret over the rejection of what it called “Lex USA”, noting that “a federal law would have been the best possibility for creating legal certainty, so that the banks in Switzerland can make use of the US’ programme in order to draw a line under the past”.
It added: “The SBA expects the Federal Council to assume its responsibility and do everything in its power to ensure that a legal framework is created that nevertheless renders the implementation of the US programme possible.
“The banks cannot meet the requirements of the programme without legal certainty. The consequences thereof for the financial centre and the entire Swiss economy are incalculable. Switzerland must not take the risk of a further indictment of a bank lightly.”
The proposed legislation – officially known as the Federal Act on Measures to Facilitate the Resolution of the Tax Dispute between Swiss Banks and the United States – had been finalised in May.
As written, it would have provided for a one-year window during which the data requested by the US authorities could have been transferred to them.
Client names and account details would have continued 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 have been permitted to be exchanged.
At the time the proposed legislation was drawn up, Swiss finance minister Eveline Widmer-Schlumpf was quoted as saying that it represented the best option for restoring stability to Switzerland’s financial sector.
Those in favour of it had sought to get it approved this month because it was felt, as a statement on the website of the Swiss Confederation put it last month, that the United States was "unprepared to wait any longer".
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