Swiss banks will be allowed to pass on more confidential information to the United States authorities to clear up the ongoing tax evasion row between the two countries, the government announced on Wednesday.
While banks would not be allowed to hand over client names or account details, they could reveal a paper trail of information on their business dealings with US clients allowing prosecutors to track down tax dodgers who have hidden undeclared assets in Switzerland.
Bank employees could also find themselves in the firing line as a long-awaited bill, to be presented for parliament approval in June, would also allow their identities to be revealed to the US.
The proposed deal would allow banks to cooperate with the US authorities «to safeguard their interests» against prosecution or possible exclusion from the US financial centre, the government announced in a statement.
But to gain information on specific clients and their accounts the US would still have to apply to the Swiss government for judicial assistance to get this detailed confidential information.
The Swiss government explained its reason for rushing the deal as: «the United States is unprepared to wait any longer with the arrangement for the past for Swiss banks». The US has been pushing for information on suspected tax evaders sheltering assets in Swiss banks since UBS was successfully prosecuted in 2009.
It was revealed earlier this week that the US had sent a judicial assistance request for information concerning Julius Baer bank clients. In April, Manhattan prosecutors indicted another Swiss banker and a lawyer of suspicion of aiding and abetting tax evasion.
In January last year Switzerland’s oldest private bank, Wegelin, was put out of business after being caught red-handed aiding and abetting US tax dodgers.
In a statement, the Swiss government insisted that it was acting in the best interests of banks, clients, employees and other third parties.
«If banks were not authorised to cooperate with the US authorities, the initiation of further criminal investigations or charges concerning banking institutions could not be ruled out,» the statement read. «The uncertainty for the financial centre would continue to exist.»
Swiss banks would be authorised to name employees involved in US client business, but would be obliged to inform staff beforehand and provide «protection against discrimination and dismissal.»
More to follow.