Switzerland to let banks sidestep secrecy laws

The Swiss government said last week that it would allow its banks to disclose information on American clients with hidden accounts, a watershed move intended to help resolve a long-running dispute with the United States over tax evasion.

The decision, which comes amid widening scrutiny in Europe of tax havens, is a turning point in what has been an escalating conflict between Switzerland and the United States.

Eveline Widmer-Schlumpf, Switzerland's finance minister, said the move would enable Swiss banks to accept an offer from the United States government to hand over broad client details and pay fines in exchange for a promise by United States authorities not to indict any banks. Disclosure of actual client names and account data, which American authorities have been aggressively seeking, would take place under a taxation treaty between the two countries that the American side has not yet ratified. Banks under criminal scrutiny that agree to cooperate with the decision could still face deferred-prosecution or non-prosecution agreements, a lesser punishment than indictment.

Widmer-Schlumpf declined to say how much banks might have to pay. But she said the Swiss government would not make any payments as part of the agreement. Sources briefed on the matter say the fines could eventually total $7 billion to $10 billion.

American clients whose names are handed over by Swiss banks but who have not voluntarily disclosed hidden accounts to the Internal Revenue Service would probably face criminal tax-evasion charges, lawyers said.

Switzerland to let banks sidestep secrecy laws 06/02/13 [Last modified: Sunday, June 2, 2013 7:26pm]

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