(Bloomberg) The Swiss parliament rejected a bill designed to resolve a dispute over undeclared bank accounts held by U.S. citizens, potentially setting the stage for American prosecution of the country’s banks.
Members of parliament’s lower house voted 123 to 63 against the bill Thursday, which would have allowed Swiss banks to cooperate with the U.S. 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 U.S. 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.
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 criticized it because the terms of the program, such as fines, were determined by the U.S. and hadn’t been made public.
U.S. 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 on Wednesday.
The Swiss Bankers Association regretted parliament’s decision, saying it was hard to gauge the consequences of the step for the banking sector and the economy.
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