Switzerland’s parliamentary panel voted on May 21 to continue discussions towards a settlement with US authorities that would see data on 4,450 US deposit holders in Swiss banks handed to US authorities. Swiss political parties have reluctantly reversed their opposition to the agreement with US authorities, which contravenes Swiss confidentiality laws, indicating that the bill allowing the transfer of the data will be passed when it is subject to a vote in June.
In particular on Friday the conservative People’s Party, or SVP, u-turned on its adamant opposition of the move, and said it would support the bill to prevent the introduction of a bonus tax on bankers bonuses in Switzerland, after its rival party, the Social Democrats, said it would support the move in exchange for agreement on such a tax.
While the move will signal a significant relaxation in Swiss banking secrecy laws, the move will prevent further backlash against the territory from US authorities, but will likely spur an influx of similar requests from other countries. Experts said the attractiveness of Switzerland as a private banking hub would not be significantly hit by the development, should the parliament adopt the bill, noting that Switzerland, as a financial centre, will continue to attract depositors even after the proposed relaxation of its banking secrecy regime.
In August 2009 UBS agreed to a fine of USD780m and agreed to discuss the transfer of data on 4,450 accounts to the IRS, far short of the 52,000 names originally sought. On March 31, 2010, in discussions with the US government, the Swiss government agreed to amend its double tax agreement with the US to allow for the exchange of tax information in cases of extreme tax evasion. This amendment will facilitate the exchange of tax data on account holders with the largest outstanding tax liability to US authorities, but must first gain approval from the Swiss parliament in June.
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