Switzerland frees banks to settle U.S. tax evasion cases
ZURICH (Reuters) - The Swiss government agreed on Wednesday to create a legal basis that will allow its banks to settle investigations by U.S. authorities into their role in helping wealthy Americans evade billions of dollars in tax.
The agreement would give dozens of banks permission to reach settlements, expected to require them to pay fines totaling billions of dollars to the U.S. authorities.
Special permission will be granted to allow banks to turn over new information about the behavior of their staff and clients, although the government said no changes would be made to rules protecting clients' identities.
After a regular cabinet meeting, the finance department said the government was proposing legislation to be rushed through parliament in the summer session in June.
"If banks were not authorized to cooperate with the U.S. authorities, the initiation of further criminal investigations or charges concerning banking institutions could not be ruled out," the department said in a statement.
The country's biggest bank UBS UBSN.VX was forced in 2009 to pay a fine of $780 million and hand over the names of more than 4,000 clients, delivering the U.S. authorities information that allowed them to then pursue other Swiss banks.
Switzerland's long tradition of bank secrecy, which protects the identity of its clients, has seen the country become a haven for untaxed funds and the world's biggest offshore center, with $2 trillion in assets.
But that tradition has come under heavy fire since the financial crisis as cash-strapped governments around the world have clamped down on tax evasion, with authorities probing Swiss banks in Germany and France as well as the United States.
The banks under formal U.S. investigation include Credit Suisse CSGN.VX, Julius Baer BAER.VX, British bank HSBC's (HSBA.L: Quote) Swiss arm, privately-held Pictet in Geneva, and smaller players such as LLB's Swiss arm LLB.S and local government-backed Zuercher Kantonalbank and Basler Kantonalbank BSKP.S. Continued...