Swiss banks wanting to cooperate with the United States authorities by handing over bank data in a bid to avoid criminal charges for allegedly helping US tax dodgers must apply for special individual authorisation from the Swiss government.
The cabinet agreed on parameters for granting authorisation on a case-by-case basis on Wednesday in an attempt to draw a line under the long-running tax-evasion dispute with the United States that has affected relations over the past four years.
The new procedure is a compromise on the part of Swiss Finance Minister Eveline Widmer-Schlumpf whose proposal to introduce new legislation to enable banks to cooperate with the US authorities was rejected by parliament last month.
Fourteen Swiss banks are reportedly under investigation in the US for allegedly helping rich clients evade tax. The list includes Credit Suisse, Julius Baer, the Swiss arm of Britain’s HSBC, privately held Pictet in Geneva and local government-backed Zuercher Kantonalbank and Basler Kantonalbank.
The first 12 of these establishments subject to a formal investigation in the US will be first in line to receive authorisations, Widmer-Schlumpf said at a media conference in Bern, adding that she expected the government would have to process a large number of authorisations.
However a government statement stressed that banks would not be allowed to hand over client data under the new authorisation procedure.
«This data can only be supplied within the scope of existing agreements with the USA in the area of double taxation via administrative assistance,» it said.
Talks are continuing with the US justice department concerning a programme it is offering to other Swiss banks not yet under investigation to settle past actions. These banks will also need authorisation in order to participate in the programme.
To obtain the individual authorisation banks must inform employees and third-party lawyers and asset managers that may be concerned by the data transfer to the US.
For current and former employees provision has also been made for expanded welfare obligations and adequate protection against discrimination, the cabinet said.
Complicated solution
The government has been working furiously to find a path between the intransigent US authorities and Swiss legal obstacles which hinder the transfer of confidential data.
Finding a legally compliant solution was complicated by parliament’s rejection on June 19 of the so-called Lex USA bill to settle cases.
Hanging over their heads is the possible risk the US issues any number of banks with the type of criminal indictment that signalled the annihilation of Wegelin earlier this year.
Despite today’s decision Swiss banks still risk being taken to court in Switzerland or the US.
Following a bank data transfer order issued in April 2012, a handful of bank staff served civil writs on their employers, with one achieving partial success in Geneva’s administrative court.
On June 21, the court slapped a temporary ban on Credit Suisse releasing the employee’s details to the US, challenging the bank to prove that its future business interests depend on the transfer going ahead.
It remains to be seen what the government could do to protect the rights of bank employees or third parties if the data transfer goes ahead. Observers are sceptical that any measures could properly protect employees’ rights.
According to Boston Consulting Group, Switzerland is the largest centre for global offshore wealth with $2.2 trillion, or about 26 per cent of the global market.