UPDATE 2-Switzerland to help banks avoid U.S. tax charges

Wed Jul 3, 2013 10:41am EDT

* Swiss plan would allow banks to cooperate with U.S.

* Banks ok to reveal info eg accounts moving to other banks

* Parliament rejected bill last month to speed data transfer

* Minister says 12 banks should now be able to settle

* Talks continue with DoJ for rest of financial industry

By Emma Thomasson

ZURICH, July 3 (Reuters) - Swiss banks will be allowed to cooperate with U.S. authorities under a government plan agreed on Wednesday aimed at saving the industry from criminal charges of helping Americans evade tax.

U.S. authorities want Swiss banks to pay fines potentially totalling $10 billion and hand over the names of Americans it suspects of using secret accounts to evade tax, but strict secrecy laws stop the banks from complying.

The Swiss government said it had agreed the parameters under which banks could cooperate and said they could apply for individual permission to allow them to settle tax investigations, though they would not be allowed to hand over client names.

But banks will be allowed to reveal information - such as 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, without naming them.

Yet government permission is likely to be tested in court by bank staff seeking to hold up the transfer of their names.

"The government will have to be careful about what data it authorises banks to pass to the U.S. authorities," said Douglas Hornung, a Geneva-based lawyer acting for a former Credit Suisse employee who is challenging the transfer of his data.

The Swiss parliament last month rejected legislation that would have made such legal challenges harder and helped to speed up the transfer of data.

The government, which has been trying to reach a deal for the banks for three years, has warned that the patience of the U.S. authorities is running out, risking a repeat of the indictment which felled private bank Wegelin earlier this year.


Swiss secrecy laws have helped to make the country the world's biggest offshore financial centre, but have also drawn the ire of countries seeking to fight tax evasion, with Swiss banks also under investigation in Germany and France.

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 local government-backed Zuercher Kantonalbank and Basler Kantonalbank .

Finance Minister Eveline Widmer-Schlumpf told a news conference those banks should now be able to settle with the U.S. authorities as they could seek permission to hand over information on accounts moved to other banks.

But she said the government was conducting further talks with the U.S. Department of Justice concerning a programme it is offering to Swiss banks not yet under investigation, which could involve dozens more institutions.

Widmer-Schlumpf said it remained to be seen how Washington would respond to the latest move by the Swiss government and declined to give any details of timing for the talks. U.S. authorities have consistently declined comment on the matter.

The main industry lobby, the Swiss Bankers Association (SBA), welcomed the move, saying: "The SBA expects that this will finally create legal certainty so that the banks in Switzerland can make use of the U.S. unilateral programme."

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