GENEVA, Genève: The Swiss government agreed Wednesday to a new US plan to settle a bitter dispute between the two countries and halt Washington’s legal action against Swiss banks suspected of stashing cash for US tax dodgers.
“At its meeting today, the Federal Council discussed the proposal for resolving past issues in the tax dispute with the United States,” the government said in a statement.
The Swiss finance ministry had been tasked with putting the finishing touches on the new deal with the Americans, it said, adding that a joint statement would be published as soon as both sides had signed it.
The new deal should allow Swiss banks to settle with US authorities over their suspected complicity in past tax evasion and bring an end to a dispute that has poisoned relations between the two countries for years.
The Swiss Bankers Association (SBA) hailed the announcement, pointing out in a statement that the deal “enables all banks in Switzerland to settle their US past quickly and conclusively and creates the necessary legal certainty.”
Swiss banks are believed in the past to have accepted billions of dollars belonging to American citizens who have not declared these assets to US tax authorities, though they now refuse such money.
The new deal comes after the Swiss parliament in June rejected an initial agreement, which would have temporarily lifted Switzerland’s long-sacrosanct banking secrecy, offering the banks a blanket one-year waiver to reveal details about accounts held by US citizens.
That agreement too received Swiss government backing, but many lawmakers were outraged that they were asked to vote on the deal without being given access to the details inside, and also expressed concern that it breached Swiss sovereignty.
Instead of a blanket waiver of banking secrecy rules the new deal allows Swiss banks to apply on a case-by-case basis for government permission to cooperate with US investigators.
The new deal also does not require parliamentary approval.
“As soon as the programme becomes public, each bank will analyse its situation and then make a decision” on how to proceed, SBA said.
The battle with Washington began in 2009 after UBS was fined in the United States for complicity in tax evasion — an issue in sharp focus amid the financial crisis.
Fourteen other Swiss banks ended up in US sights for grabbing former UBS clients, including Julius Baer, Credit Suisse and BKB.