Switzerland proposed a bill that it says paves the way for the country’s banks, including Credit Suisse Group AG and Julius Baer Group Ltd., to resolve a tax- evasion dispute with the U.S.
The bill authorizes Swiss banks to cooperate with U.S. authorities and transfer information while safeguarding their interests, the government said in a statement today. The Swiss Parliament will consider the bill as soon as next week and it could come into force on July 1.
“The sense of urgency is because preparations were being made for more banks to be made responsible,” Swiss Finance Minister Eveline Widmer-Schlumpf told reporters in Bern today.
Switzerland has been in talks with the U.S. for more than two years to resolve a Justice Department investigation of at least 14 financial firms that allegedly helped Americans hide money from the Internal Revenue Service. The Swiss government wants to prevent another bank being indicted after Wegelin & Co. pleaded guilty in a Manhattan federal court in January to conspiring to help conceal more than $1.2 billion from the IRS.
The bill will enable banks to pass on information on employees and third parties who worked with American clients, the Swiss government said.
Appeasing U.S.
“Switzerland appears to be appeasing the U.S. authorities to prevent further indictments,” said Jeffrey Morse, a private client attorney with Withers LLP in Geneva. “The U.S. may use the information to widen its probe to lawyers, trust companies, advisers and other middlemen who helped create the offshore structures used for tax evasion.”
The bill doesn’t allow for banks to transfer client data, which can only be passed on through administrative assistance procedures under a tax agreement with the U.S., the government said.
Julius Baer, Switzerland’s third-largest wealth manager, informed some American clients this month that their accounts meet the criteria of a U.S. request for data, the Zurich-based bank wrote in a letter obtained by Bloomberg News.
Raymond Baer, honorary chairman of Julius Baer, said in a presentation to the British-Swiss Chamber of Commerce in Geneva that the government’s proposal needs to be analyzed before making any comment.