December 13, 2011 / 2:00 PM / 6 years ago

Swiss upper house backs move to end U.S. tax row

* Proposal backed by upper house, must still pass lower

* Designed to reinforce U.S.-Swiss pact on double taxation

* Swiss under pressure to hand over client names

ZURICH, Dec 13 (Reuters) - Swiss lawmakers took a step on Tuesday towards helping the government seal a compromise over banking secrecy rules that would enable it to hand over the names of wealthy Americans suspected of dodging taxes.

Famed for the care with which it protects account holders’ anonymity, the Alpine state has been forced to act by a series of U.S. probes into alleged tax evasion by Americans concealing their assets in Swiss banks.

Parliament’s upper house backed a proposal aimed at sealing any potential legal loopholes and avoiding a lengthy court fight by bank clients seeking to protect their identity.

“This step should help negotiations that could free the financial centre from this problem that has plagued it for years,” said Free Democrat parliamentarian Felix Gutzwiller.

The proposal, which still has to be voted on by the lower house, would allow Switzerland to hand over data on suspected tax evaders, even if the U.S. tax authorities cannot identify an alleged offender by name or bank account.

The Swiss government has been in talks with U.S. authorities for months to try to get an investigation into 11 banks dropped, in return for expected hefty fines on the banks and the handing over of the names.

Credit Suisse, Julius Baer and Basler Kantonalbank are among the banks under investigation. Credit Suisse last month took a charge against its third-quarter earnings of 295 million Swiss francs ($315.74 million) towards settling the U.S. investigation.

In 2009, the Swiss parliament approved a deal to allow UBS to reveal details of around 4,450 U.S. clients to end lengthy tax proceedings that had threatened the future of the country’s biggest bank.

Switzerland and the United States have sealed a new double taxation pact, and officials from the two countries met last week in Berne to try to end the long-running banking dispute, amid signs they could be nearing a deal.

Finance Minister Eveline Widmer-Schlumpf told parliament she was also working on a deal with the United States for the rest of the Swiss banking industry beyond the 11 banks under investigation, which would have to be approved separately.

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