Swiss banks face the risk of further indictments for helping U.S. citizens evade taxes after Swiss lawmakers rejected a bill that would help resolve a tax dispute.
Unless legislators change their mind in a second vote later this week, there is a “real risk of escalation” from the U.S. side, Swiss Finance Minister Eveline Widmer-Schlumpf told parliament today. The Swiss government announced a July 1 for the bill to take effect.
Switzerland wants to prevent the indictment of another bank after Wegelin & Co. pleaded guilty in January to conspiring to help conceal money from the U.S. The bank had taken over clients from UBS AG, which in 2009 paid a fine of $780 million and handed over client names in a U.S. settlement.
“There’s a real risk of further banks being targeted,” Widmer-Schlumpf said in parliament in Bern today, warning of the consequences of a rejection. “Any bank with U.S. clients or which broke U.S. law could be affected.”
After almost three hours of deliberations, lawmakers in the lower house voted 126 to 67 against discussing the draft law, following recommendations of the economics committee. The proposal has proved controversial among parliamentarians, who called it a “black box,” because its terms were held secret.
The upper house will now vote on the proposal for a second time after passing it last week. If that chamber approves it again, the bill returns to the lower house for another vote. Should the lower house come to the same verdict as today, the law fails.
“At the moment I see no chance the lower house will approve the bill,” said Thomas Widmer, a political scientist at the University of Zurich.
The Swiss government proposed the bill three weeks ago in a bid to solve a long-running disagreement with the U.S. over Swiss banks that allegedly helped U.S. tax evaders. The government wants it to come into effect in July, though parliamentarians have voiced skepticism about the measure, saying its terms were set out by the U.S. and still remain secret.
“I have a deep sense of unease about the law before us,” Jacques-Andre Maire, a lawmaker for the Social Democrats SP, said during the debate. “We’re being asked to sign a blank check for banks’ misdeeds.”