Tags: Switzerland | Tax | Deal | Banks

Swiss Lawmakers Reject Deal to End US Tax Spat

Tuesday, 18 Jun 2013 07:19 AM

Swiss lawmakers have rejected a government-backed banking bill meant to end a high-profile legal standoff with the United States over suspected American tax cheats.

The country's lower house in the capital Bern voted Tuesday not to discuss the measure that Finance Minister Eveline Widmer-Schlumpf had presented as a way for Swiss banks to disclose client information to U.S. authorities without breaking Switzerland's strict client secrecy laws.

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By a wide margin of 126-67 with two abstentions, Switzerland's National Council sent the proposal back to the upper house for reconsideration. The upper house had approval the proposal last week.

The intention behind the bill is to provide a legal means for Swiss banks to turn over confidential data to U.S. prosecutors. By doing so, the banks will be able to cut deals that may include the payment of fines to avoid criminal charges.

But the parliament's summer session draws to a close this week, reducing the odds of an imminent compromise. A second refusal by the lower house would effectively kill the bill.

Widmer-Schlumpf told lawmakers that the U.S. is planning to bring criminal charges against some Swiss banks and that without the legislation there is "real danger of an escalation" in the standoff between the two countries.

More than a dozen Swiss banks are being investigated by U.S. authorities.

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