By John Letzing
ZURICH--Lawmakers in the upper house of Switzerland's parliament
voted in favor of a plan for many of the Alpine nation's banks to
begin handing information to the U.S. Department of Justice
investigating alleged tax evasion by Americans, prolonging a
legislative debate under pressure to wrap up in the next few
days.
The smaller, upper house of Switzerland's parliament voted 26-18
Wednesday to adopt the proposed plan, which would have a number of
banks take steps to resolve outstanding issues with U.S.
authorities in the midst of a global tax evasion crackdown.
The vote affirms previous approval of the plan in the upper
house last week, which was followed by a sharp rejection in the
lower house on Tuesday.
In the lower house, lawmakers had raised concerns about the
heavy-handedness of the U.S. effort to have them sign off on a
measure that would enable banks to sidestep the country's banking
secrecy law. Other lawmakers had raised concerns about the lack of
detail in the plan regarding potential fines for banks that opt to
participate, and the potential legal hazards for Swiss bankers,
lawyers and advisers.
The lower house is now expected to again take up the measure as
soon as Wednesday afternoon. If it is rejected again, lawmakers in
the upper house have resolved to seek an alternative solution with
the U.S.--but offered no details as to what that might entail.
The Swiss cabinet had unveiled the plan for a U.S. resolution
last month, and indicated parliament should act swiftly to approve
it due to the dwindling patience of American authorities. One Swiss
bank, Wegelin & Co., has already been indicted in the U.S. and
is now defunct. The DOJ reached a deferred prosecution agreement
with the country's biggest bank, UBS AG (UBSN.VX), in 2009.
That agreement had UBS admit it helped Americans use Swiss
accounts to evade taxes and it had to pay a $780 million fine.
Now, time is running short for the Swiss parliament to approve
the plan for a broader group of banks to settle outstanding issues
with the U.S.
Parliament's current session ends Friday, and failure to pass
the proposed plan would create an unnerving lack of clarity for
many of Switzerland's roughly 300 banks, according to Peter V.
Kunz, a professor of business law at the University of Bern.
"This is the major problem," said Mr. Kunz, "Swiss banks, and
banks in general, need some certainty in their business--and right
now no one really knows what's going to happen."
The heated debate in Switzerland's parliament over the proposed
plan comes as the country struggles to come to terms with mounting
attacks on its legendary bank secrecy. Switzerland remains the
world's biggest center of offshore wealth, with $2.2 trillion held
there last year, according to data from the Boston Consulting
Group.
The DOJ's efforts to locate undeclared offshore assets gained
steam in the wake of the 2008 financial crisis, as U.S. and other
governments sought to recover lost tax revenue. The UBS agreement
was a key step for the DOJ in Switzerland, where it has since
sought to track the undeclared wealth that dispersed from
Switzerland's biggest bank to other institutions.
Roughly a dozen Swiss banks have already been cooperating with
U.S. authorities as part of their tax probe, including Credit
Suisse Group AG (CSGN.VX) and Julius Baer Group AG (BAER.VX).
Credit Suisse has set aside 295 million Swiss francs ($321
million) to eventually settle U.S. tax matters.
Write to John Letzing at john.letzing@wsj.com