The lower house of the Swiss Parliament voted 126-67 against plans to share information about alleged U.S. tax evaders with U.S. authorities, pushing back against the Swiss cabinet and the Obama administration, the Wall Street Journal reported Tuesday.
Under the now-defeated proposal, Switzerland’s approximately 300 banks would start providing information about their past clients to the U.S. Department of Justice, though they wouldn’t share client identities.
Parliamentary critics argue that the measure is “blackmail” by U.S. authorities, who are pressuring Switzerland to do their bidding and that fines for banks violating the agreement could be unacceptably high, up to 10 million Swiss francs ($10.8 million).
But the Swiss cabinet has said that the alternative could be prosecution by U.S. authorities and heavy legal fines. Wegelin & Co., formerly Switzerland’s oldest bank, was indicted by U.S. prosecutors last year and is now defunct, the Journal reports.
In late May, the Swiss cabinet said that the legislation will bring “legal closure” and “put the past to rest.”
“If banks were not authorized to cooperate with the U.S. authorities, the initiation of further criminal investigations or charges concerning banking institutions could not be ruled out,” warned the cabinet in a statement.
They urged swift passage at the time, but now time is running out and the upper house of the Swiss Parliament must reconsider the measure, which it approved earlier in June.
The Swiss summer lawmaking session is set to end on Friday, with the autumn session restarting on Sept. 9.
Nat Rudarakanchana covers commodities and companies for the International Business Times. He is especially interested in precious metals, the food and drink industry, and...