Newspaper article International Herald Tribune

Swiss Plan Aims to Calm Tax Dispute

Newspaper article International Herald Tribune

Swiss Plan Aims to Calm Tax Dispute

Article excerpt

The plan is intended to open the way for hundreds of Swiss banks to end the threat of criminal prosecution by the U.S. Justice Department.

The Swiss government said Wednesday that it had found a way to allow the country's banks to turn over data to the United States in spite of strict banking secrecy laws, potentially opening the way for hundreds of lenders to end the threat of criminal prosecution by the U.S. Justice Department.

The governing Federal Council said in a statement that banks wishing to hand over information would be able to seek authorization from the Swiss government on an individual basis, "within the scope of existing law and particularly data protection and employment law provisions."

The central government's plan is needed to address the vacuum left after Parliament adjourned for the summer without having approved an information-sharing agreement with the United States. The lower house of Parliament refused to hear that proposal last month, effectively killing it, but both houses called on the government to "take every measure within the scope of existing law to enable the banks to cooperate with the Department of Justice."

Some sort of Swiss government approval is essential for any information-sharing, because it is a crime under Swiss law to transfer bank data to foreign authorities. But the announcement Wednesday was notable for its lack of detail, suggesting that the government had not yet come up with a way to satisfy both sides of the dispute.

As with the failed parliamentary measure, the Federal Council's proposal does not provide for any transfer of individual client data, something that is handled through requests from one government to another. Banks could, however, seek permission to turn over information on employees who had dealt with American tax evaders, as well as information about how tax dodges that targeted American clients actually worked. …

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