UPDATE 3-Lawmakers back Swiss govt plan to seal U.S. tax pact

Thu Nov 10, 2011 3:53pm EST

* Swiss parliamentary commission panel backs govt plan

* Govt proposal must be approved by Swiss parliament

* Proposal translates to ongoing tax talks

By Katharina Bart and David Ingram

BERNE/WASHINGTON, Nov 10 (Reuters) - A Swiss parliamentary commission on Thursday recommended lawmakers back a proposal clarifying how Switzerland would hand over data on wealthy Americans suspected of cheating and dodging taxes at home.

The proposal is meant to reinforce a double tax pact already reached between Switzerland and the United States, and to end a long-simmering dispute over to what extent Switzerland will hand over bank client data to U.S. tax officials.

The United States and other nations, faced with soaring government deficits, are cracking down on offshore tax dodgers. A focus of this effort has been Switzerland and its long tradition of bank secrecy, which is slowly being eroded.

The Swiss commission's backing is not binding on lawmakers, but it indicates that parliament will approve the proposal. It also indicates that both houses of parliament will address it before year-end, as the Swiss government had hoped.

The proposal represents a Swiss government attempt to seal potential legal loopholes and avoid a lengthy court fight by Swiss bank clients seeking to protect their identities, while it also has implications for an ongoing U.S. probe into banks.

A deal over UBS data reached by the Swiss government in 2009 was later upended by Swiss court, forcing the government to turn to parliament to push the deal through.

Basler Kantonalbank , Credit Suisse and Julius Baer are among 11 Swiss banks under investigation in connection with allegations they helped Americans dodge taxes.

The Swiss government has been in talks with U.S. authorities for months to seek a deal to get investigations dropped in return for payment of fines and the transfer of names of clients suspected of tax evasion.

The U.S. clinched a key victory in its crackdown on offshore centers in 2009, reaching a deal with Swiss authorities for UBS to pay a fine of $780 million and reveal details of around 4,450 clients, averting criminal charges.

TWO UBS CLIENTS SENTENCED

Two U.S. men who each hid millions of dollars in UBS accounts were sentenced separately on Wednesday, the U.S. Justice Department said.

A Manhattan federal judge sentenced Richard Werdiger, 64, to a year and a day in prison for failing to disclose $7.1 million in assets and for not paying $400,000 in taxes. He agreed to pay a civil penalty of $3.8 million.

A federal judge in San Francisco sentenced Robert Greeley, 79, to six months home confinement and three years probation for failing to disclose $12 million in UBS accounts and for not paying $17,000 in taxes. Prosecutors recommended a prison sentence of 10 months, but Greeley's lawyer asked for probation because of his client's age and the $6.8 million civil penalty he already paid.

Greeley and Werdiger each pleaded guilty.

Specifics of the latest Swiss proposal include obliging Switzerland to hand over client data in some cases, even if a foreign tax authority cannot identify an alleged tax offender by name or bank account. That would depart from past practice.

A notable example involves clients with offshore vehicles outside the United States and Switzerland, if evidence shows a Swiss bank or its staff lent considerable assistance in setting up the vehicles.

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