Swiss parliament rejected a Bill designed to resolve a dispute over undeclared bank accounts held by US citizens, potentially setting the stage for American prosecution of the country's banks.
Members of the Swiss parliament's Lower House voted 123 to 63 against the Bill, which would have allowed Swiss banks to cooperate with the US and to settle a long-running dispute over wealthy American tax evaders. The government has said it has no plan B, in the event of the Bill failing to pass.
Switzerland wants to prevent the indictment of another of the country's banks. Wegelin & Co was indicted last year and pleaded guilty in January to helping US taxpayers hide assets from the Internal Revenue Service. The bank had taken over clients from UBS AG, which avoided prosecution in 2009 by admitting it aided tax evasion, paying $780 million and handing over client names.
"I don't think the Americans will really start a wave of indictments - such a horror scenario is unlikely," said Peter V Kunz, a professor of comparative law at the University of Bern. "I do however think the one or other banker could face charges. But no one really knows. The legal risks and the legal uncertainties will remain for the Swiss financial sector. How it all will end is totally up in the air."
US terms
The Bill, which the country's banks supported, divided institutions into four categories based on the size of their American business and allowed them to hand over some information - though not client names. Parliamentarians criticised it because the terms of the programme, such as fines, were determined by the US and hadn't been made public. US Department of Justice spokeswoman Dena Iverson didn't immediately return calls seeking comment.
"I see big difficulties after today's decision," Swiss Finance Minister Eveline Widmer-Schlumpf told Swiss public broadcaster SRF.
The no vote could lead to a another Swiss bank facing criminal charges in the US, which could impact the economy, she said yesterday. Any decree the government could pass instead of a Bill would have a smaller scope and not meet all the US requests, she said.
Members of the Swiss parliament's Lower House voted 123 to 63 against the Bill, which would have allowed Swiss banks to cooperate with the US and to settle a long-running dispute over wealthy American tax evaders. The government has said it has no plan B, in the event of the Bill failing to pass.
Switzerland wants to prevent the indictment of another of the country's banks. Wegelin & Co was indicted last year and pleaded guilty in January to helping US taxpayers hide assets from the Internal Revenue Service. The bank had taken over clients from UBS AG, which avoided prosecution in 2009 by admitting it aided tax evasion, paying $780 million and handing over client names.
"I don't think the Americans will really start a wave of indictments - such a horror scenario is unlikely," said Peter V Kunz, a professor of comparative law at the University of Bern. "I do however think the one or other banker could face charges. But no one really knows. The legal risks and the legal uncertainties will remain for the Swiss financial sector. How it all will end is totally up in the air."
US terms
The Bill, which the country's banks supported, divided institutions into four categories based on the size of their American business and allowed them to hand over some information - though not client names. Parliamentarians criticised it because the terms of the programme, such as fines, were determined by the US and hadn't been made public. US Department of Justice spokeswoman Dena Iverson didn't immediately return calls seeking comment.
"I see big difficulties after today's decision," Swiss Finance Minister Eveline Widmer-Schlumpf told Swiss public broadcaster SRF.
The no vote could lead to a another Swiss bank facing criminal charges in the US, which could impact the economy, she said yesterday. Any decree the government could pass instead of a Bill would have a smaller scope and not meet all the US requests, she said.