Swiss banks seek permission to send data in U.S. probe-sources

Fri Jul 12, 2013 9:37am EDT

* Five banks seek government permission to send data-sources

* Account transfers represent last piece of data puzzle

* Data move still subject to legal appeal by third parties

By Katharina Bart

ZURICH, July 12 (Reuters) - Credit Suisse and Julius Baer are among five Swiss banks which have sought government approval to hand data to U.S. prosecutors in a bid to reach settlements in a long-running tax dispute, four sources familiar with the matter said.

The requests represent a push towards sealing a final deal for some of the dozen Swiss banks in the crosshairs of U.S. prosecutors for helping wealthy Americans evade taxes through hidden accounts.

Some of the five, which also include local government-backed banks Zuercher Kantonalbank and Basler Kantonalbank and the Swiss arm of Britain's HSBC, expect the government to approve their request in the coming days, two sources said.

The Swiss government, which has been trying to reach a deal for the banks for three years, declined to comment on Friday.

The banks under investigation have long been keen to cooperate to avoid indictment, which put Swiss private bank Wegelin out of business this year. But they have been prevented from doing so in full by strict secrecy laws, which have helped make Switzerland the world's biggest offshore financial centre.

"We don't comment on details of the process, but do continue to cooperate closely with the U.S. authorities," said a spokesman for HSBC's private bank. He didn't comment further.

The remaining four banks didn't comment.

The five banks have already handed over data on their U.S. dealings as well as staff involved in the offshore business, but the U.S. authorities still want information on where clients closing their accounts moved their money.

The Swiss government paved the way for the banks to comply last week, saying it would grant them individual permission to deliver exit lists, information which will help investigators pursue tax evaders and their bankers.

Swiss Finance Minister Eveline Widmer-Schlumpf said last week the move should allow the dozen banks to settle.

Former Credit Suisse private banking head Walter Berchtold said the bank could now move forward after that decision.

"Whether Credit Suisse is the first or last to settle, I don't know," Berchtold, who left the Swiss bank after more than 30 years last week, told Sunday's Sonntagsblick, a Swiss weekly.

Others targeted by U.S. investigators include privately-held Pictet, Liechtenstein Landesbank's Swiss arm and Bank Frey, but it was not immediately clear if or when they might seek Swiss government approval to deliver data.

While permission to send data on their U.S. dealings would represent a step forward, it doesn't necessarily mean the banks will quickly reach settlements to avert criminal prosecution and settle the matter definitively, two sources said.

Definitive settlements are subject to negotiation over fines which could total $10 billion for the entire Swiss banking industry.

Even after they gain government approval, the five banks cannot send data to the United States immediately because the transfer is subject to potential legal appeals.

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