Banks start controversial US data handover

The latest release of sensitive bank data to the United States, including numbers of clients who moved assets to other banks, will open up a dangerous new front in the tax evasion row, according to a lawyer who represents bank employees.

The latest release of sensitive bank data to the United States, including numbers of clients who moved assets to other banks, will open up a dangerous new front in the tax evasion row, according to a lawyer who represents bank employees.

Credit Suisse and Zurich Cantonal Bank have admitted to being the first Swiss banks to get government approval to transfer the so-called «leaver lists» to the US under the terms of a recently brokered deal.
 
Earlier this month, the Swiss government decided to grant banks special permission to release the names of their employees and other third parties involved in their US business dealings, despite failing to get parliamentary approval for the plan.
 
More controversially, the data will allow the US authorities to trace assets that were switched from one Swiss bank to another as their investigative net began closing on Switzerland. While names and account details will be excluded, the data will include numbers of clients, the number of assets moved together with the identity of destination banks.
 
«The real purpose of the leaver lists is not for the US authorities to obtain information in cross-border activity to help them determine the size of fines to be imposed on Swiss banks,» Geneva lawyer Douglas Hornung, who has represented several bank employees fighting against their name being disclosed to the US, told swissinfo.ch.
 
«It is to help them build criminal investigations against other banks.»
 
«This is totally in violation of the Swiss criminal code,» he added. «By allowing this to happen, it opens us up to exactly the same demands from the European Union in two years’ time.»

Resolution horizon

On Thursday, Credit Suisse said it had received data transfer approval from the Swiss authorities. Zurich Cantonal Bank admitted to the Neue Zürcher Zeitung newspaper on Friday that it had also been given the green light.
 
Credit Suisse is one of a handful of banks that had already been authorised to hand over employee names to the US authorities last year.
 
«The next installment will be the so-called leaver analysis, and we’ll see where we go from there,» Chief Financial Officer David Mathers told journalists on Thursday, adding that the bank hoped to finally resolve the US tax evasion dispute by the end of this year.
 
The Swiss government would not specify how many banks could apply for permission to release the new details, but around 14 are thought to be currently under investigation by the US authorities.

Legal battles

The legality of the leaver lists is unclear, but the media have speculated that the US has inserted a «guillotine clause» into the tax treaty, rendering it null and void if the Swiss courts veto the handover.
 
Swiss Finance Minister Eveline Widmer-Schlumpf has warned that the hastily concluded data exchange deal is the last chance of avoiding further US prosecutions of the type that sank Bank Wegelin in January of last year.
 
Besides the leaver lists, the Swiss  courts could also be busy hearing complaints from lawyers, asset managers and trust fund managers about their names being handed over to the US.
 
Several bank employees have opposed the transfer of their names to the US, but apart from a handful of temporary verdicts in their favour, most of the information has been allowed to pass to the US.

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