Reuters: Regulatory News: U.S. seeks Swiss guarantee of data transfer in tax dispute talks-paper

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U.S. seeks Swiss guarantee of data transfer in tax dispute talks-paper Jul 4th 2013, 10:18 Thu Jul 4, 2013 6:18am EDT * U.S. to stop programme if Swiss courts block data -paper * Swiss warn that U.S. justice dept patience running out * Lawmakers rejected bill last month to speed data transfer ZURICH, July 4 (Reuters) - The U.S. Department of Justice (DoJ) wants a Swiss government guarantee that banks will hand over sensitive data in return for lifting the threat of criminal charges for helping their customers avoid tax, a newspaper reported on Thursday. Citing unnamed sources, the Neue Zuercher Zeitung daily said the United States was demanding that the Swiss government commit to the guarantee in a bilateral declaration before the DoJ opens a programme to allow banks to settle tax charges against them. The newspaper said the United States also wanted to include a "guillotine" clause in the agreement that would halt the programme if a Swiss court prevents a bank from delivering data. Banks are keen to give the information to the DoJ in order to avoid indictment, which put Swiss private bank Wegelin out of business this year, but have been prevented from doing so by strict bank secrecy laws. The newspaper said the Swiss government was resisting the demands because it cannot dictate to the country's courts. A government spokesman declined to comment on the report, but confirmed there was pressure to reach a deal soon. U.S. authorities have consistently declined comment on the matter. The Swiss government has been negotiating for three years to try to end the tax dispute with U.S. authorities who are demanding banks pay fines potentially totalling $10 billion and hand over the names of Americans they suspect of evading tax. Finance Minister Eveline Widmer-Schlumpf told a news conference on Wednesday that the U.S. programme to allow banks to agree fines and lift the threat of criminal charges could be launched during the summer if a deal is reached, but said the two governments were in talks to work out a joint statement. The Swiss government agreed on Wednesday that banks could apply for individual permission to allow them to settle with the DoJ by handing over details of their U.S. business, though they would not be allowed to hand over client names. Banks will be allowed to reveal information, including details of accounts moved to other banks, names of bank staff, lawyers and accountants, that would help U.S. authorities identify wealthy clients who are evading taxes. Yet government permission is likely to be tested in court by bank employees seeking to hold up the transfer of their names after the Swiss parliament last month rejected legislation that would have made such legal challenges harder. The Swiss government has warned parliament that the patience of the U.S. authorities is running out. More than a dozen banks are under formal U.S. investigation, including Credit Suisse, Julius Baer, the Swiss arm of Britain's HSBC, privately held Pictet and state-backed regional banks Zuercher and Basler. Link this Share this Digg this Email Reprints

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