Thousands of Swiss bank workers have seen their data handed over to justice authorities in the United States and are now living with a considerable amount of uncertainty.
Two years ago the US Department of Justice (DOJ) started investigating about ten Swiss banks suspected of helping thousands of wealthy Americans illegally evade taxes.
The DOJ demanded that Swiss banks supply it with all the data of controversial transactions, including the names of employees who dealt with clients subject to US tax laws and lists of American clients who have moved assets out of their accounts to another bank (Leavers Lists).
The Swiss Banks - US Tax Time Line:
The uncertainty felt by bank workers certainly didn’t ease after the Swiss parliament’s rejection in June of the “Lex USA”, a deal the Swiss cabinet hoped would fix the legal conditions for handing over data and solve the tax evasion dispute between the two countries.
At the beginning of July, Finance Minister Eveline Widmer-Schlumpf presented a “plan B”, under which the cabinet agreed to give banks special permission to cooperate with the United States authorities, paving the way for financial institutions to share data in a bid to avoid criminal charges for allegedly helping tax dodgers.
It seems that Swiss banks blacklisted by the US Department of Justice would be barred from making dollar payments via New York or London clearing accounts, effectively destroying their international business; so non compliance with US authorities in Not an Option.
With many Swiss banks under U.S. investigation for helping American clients dodge taxes, roughly a Credit Suisse, Julius Baer, the Swiss arm of Britain's HSBC, privately held Pictet and state-backed regional banks Zuercher Kantonalbank and Basler Kantonalbank; the government is anxious to secure an agreement that satisfies U.S. demands for data to help catch the tax cheats but also wants to preserve at least some elements of its cherished tradition of banking secrecy, which has long been a key part of the Alpine nation's allure for depositors.
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It remains to be seen how the United States will react to "plan B".
UBS, Switzerland's biggest bank, has said it could see client money outflows of 12 billion Swiss francs ($13 billion) in Europe as a result of a crackdown on tax evasion there, while rival Credit Suisse said clients in western Europe could withdraw up to $37 billion in the next few years.
The sector is unsure how much an eventual settlement with the United States will cost them, but total fines are likely to run into billions of dollars.
In the meantime, up to 100 others of Switzerland's 300 or so banks are suspected of having tax evaders among their clients. They have no clear guidance on what data they will need to send.
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