- MARKETS
- Updated May 29, 2013, 8:14 a.m. ET
ZURICH—Swiss banks will be able to deal directly with the Department of Justice to settle past legal issues over suspected tax evasion by Americans under a framework agreed by the Swiss cabinet, potentially lifting some of the uncertainty hanging over the country's financial sector.
The Swiss Department of Finance said the proposed plan would allow banks not already dealing directly with the DOJ in order to resolve issues to do so.
Banks, which aren't required to participate in the plan, would be allowed to share information regarding business relationships with U.S. clients and the bank employees involved. Banks that do participate will be required to provide protection to their employees, according to the statement from the finance department.
Parliament will act on the proposed deal during its summer session, it said.
The announcement Wednesday comes as pressure builds on Swiss politicians and the financial services industry to break with decades of banking secrecy. Since the onset of the financial crisis, the U.S. has ramped up efforts to track down undeclared assets in order to recover lost tax revenue.
Other countries, including Germany, France and the U.K., are also pressuring Switzerland to act on similar concerns over tax evasion.
The Swiss finance department indicated U.S. pressure had prompted it to act quickly, saying a plan is needed urgently because "the United States is unprepared to wait any longer" to resolve issues involving Swiss banks, which otherwise also would remain vulnerable to the prospect of further criminal investigations and charges.
The finance department didn't name any specific banks. Roughly a dozen banks, including
Credit Suisse Group AG and
Julius Baer Group AG,
have been under investigation for their role in helping Americans evade taxes using Swiss accounts.
In 2009, the DOJ reached a deferred prosecution agreement with
UBS AG,
under which the Swiss banking paid a $780 million fine.
Credit Suisse has previously disclosed it has set aside 295 million Swiss francs ($306 million) to deal with its U.S. tax matters. Julius Baer, which is far smaller, hasn't set aside any money in relation to the issue.
Julius Baer didn't immediately respond to an emailed request seeking comment on the Swiss plan.
A spokesman at Credit Suisse wasn't immediately reachable to comment.
Next year, banks are expected to begin operating under the Foreign Account Tax Compliance Act, or FATCA, a U.S. law that requires foreign banks to report information about accounts held by U.S. taxpayers to the Internal Revenue Service. FATCA is separate from Wednesday's proposed plan.
Martin Naville, chief executive of the Swiss American Chamber of Commerce in Zurich, said depending on its details and how it is received by the Swiss public the plan for bank settlements could be a critical turning point.
"If we can finally get rid of this banking issue we can get back to normal," Mr. Naville said. "Normal is very positive."
Write to John Letzing at
john.letzing@dowjones.com
