GENEVA (AP) -- The Swiss government announced Wednesday that it will let banks circumvent the country's strict client secrecy laws as part of an effort to end a long-running tax evasion dispute with the United States.
Finance Minister Eveline Widmer-Schlumpf told a news conference in the Swiss capital Bern that Switzerland is acting because U.S. patience is running out with the country's banks suspected of aiding American tax cheats.
The aim, she said, is to "restore stability" to the Swiss banking industry, and the banks will decide for themselves if they want to negotiate with U.S. authorities to settle legal disputes over suspected American tax evaders.
Calling it a pragmatic solution, Widmer-Schlumpf acknowledged the talks with U.S. negotiators have been difficult but said that Switzerland wanted to avoid a retroactive law. The deal was agreed to by the Swiss Cabinet and will go to parliament for approval later this year.
She declined to provide further details of the agreement, but dismissed reports that the Swiss government will pay billions of dollars upfront to cover fines the country's banks can expect to receive from U.S. authorities.
In a statement, the Cabinet said it "wants to create the legal basis for resolving the tax dispute with the United States" by enabling banks to make their own agreements with the U.S. Justice Department and for all time put the disputes behind them.
"The solution chosen will allow legal closure to be achieved without having to enact new legislation with retroactive effect or indeed applying emergency law," the statement said.
Banks that cooperate with U.S. authorities, it added, would be obliged to provide maximum protection for their employees against discrimination or dismissal.
- Financials Industry