Swiss MPs put brakes on US tax info deal

SWITZERLAND’S parliament halted a bill yesterday that would let Swiss banks hand over client information to the US authorities as part of a clampdown on tax evasion,

Politicians said they needed to know more about what the deal involved.

The Swiss government wants parliament to rush through the legislation this month to put an end to a long-running tax spat with US authorities over banks accused of helping wealthy Americans hide their money from the tax man.

The lower house backed a motion from the left-wing Social Democrats (SP) to put the bill on ice.

But it rejected demands from the right-wing Swiss People’s Party (SVP), the biggest party in parliament, to take the bill entirely off the summer session agenda, meaning it could still be debated in coming weeks.

The Swiss government has warned that US authorities could bring more criminal charges against its large banks if parliament does not act quickly.

A spokesman for Switzerland’s finance ministry declined to comment on the decision.

The Swiss government has been negotiating with US authorities for two years to try to resolve the tax dispute, but abandoned an attempt to reach an umbrella settlement deal for the whole financial industry due to secrecy laws as well as squabbling among the country’s banks as to who should pay what.

The bill now before parliament would not provide the names and account details of the Swiss banks’ clients but would allow the sharing of information on their behaviour.

Switzerland’s tradition of banking secrecy has helped make it the world's biggest offshore financial center, with $2 trillion in assets.

But it has come under fire during the global financial crisis, as governments clamp down on tax evasion, with German and French authorities also investigating Swiss banks.