Swiss Committee Recommends Rejection of U.S. Tax Bill
Swiss parliament’s full upper house will tomorrow debate a bill allowing banks to cooperate with the U.S. on untaxed assets, after committee members recommended its rejection.
Lawmakers in the upper house’s economics committee early this morning voted by 7 to 6 encouraging the plenary to reject the bill, the parliamentary services office said. The recommendation, which came after hours of discussion behind closed doors and included contributions from Swiss National Bank (SNBN) President Thomas Jordan and bank representatives, isn’t binding.
The proposed law, presented by Finance Minister Eveline Widmer-Schlumpf just two weeks ago, would allow banks to disclose some information to U.S. authorities, though not clients’ names, and strike a deal for having helped alleged U.S. tax evaders. It is the result of two years of diplomatic negotiations as the Swiss try to resolve a U.S. investigation of at least 14 financial firms, including Credit Suisse (CSGN) AG and Julius Baer Group Ltd. (BAER), that allegedly helped Americans evade taxes.
“The upper house will discuss the Lex USA tomorrow,” said Brigitte Hauser-Sueess, Widmer-Schlumpf’s spokeswoman. “Should the upper house reject it, it still will be discussed in the lower house’s economic committee and then in the plenary.”
To prevent another bank from being indicted in the U.S., the government wants the law to go into effect as early as July 1 after rushing it through both chambers of parliament in the same three-week session. Wegelin & Co., once Switzerland’s oldest bank, pleaded guilty in January to conspiring to help conceal more than $1.2 billion from the U.S.
The debate in Bern is expected to start at 8:15 a.m. tomorrow. There will be a separate vote by the upper house to determine the matter’s urgency, allowing it to come into force next month without a referendum. That will require an absolute majority of all the chamber’s delegates, rather than just a simple majority of those present, as is usually required for laws.
Regardless of whether the upper house supports the bill or not, the economics committee of the lower house will take it up on June 13, with the plenary of the larger body debating it on June 18, the parliamentary services office said.
Should one chamber pass the bill and the other reject it, there will be another session to resolve the disagreement.
Parliament’s lower house has already voiced skepticism about the plan and wants the government to provide more details about it. So far, the government has given no information to parliamentarians or the public on the terms banks might face, with Widmer-Schlumpf saying the U.S. wanted them to remain private.
In the lower house, the proportion of members from the Social Democrats SP and the Swiss People’s Party SVP is higher than in the upper, and delegates from both parties have been particularly critical of the proposal. In a debate there last week, parliamentarians termed it a “black box” and said the government was allowing the U.S. to infringe upon Swiss sovereignty and dictate terms.
Still, the case of the 2010 a law enabling UBS AG (UBSN) to hand over data on 4,450 accounts to the U.S. shows parliamentary opposition can crumble. That bill was was approved late in three-week June session after initially being voted down by the full lower house.
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