Credit Suisse will hand over details of wealthy Americans with hidden Swiss accounts to the Swiss government, bringing US authorities one step closer to obtaining names of alleged tax cheats. The bank said on Tuesday it was complying with a request from the Swiss government for account information after US authorities requested Switzerland's help in catching Americans suspected of tax fraud.
Reuters reported earlier on Tuesday that Credit Suisse had begun notifying US clients it intended to give their names to Swiss tax officials following a request from their US counterpart. Credit Suisse and the Swiss department responsible for international financial affairs declined to say how many clients were involved in the request. Last week, Credit Suisse took a 295 million Swiss franc provision against third-quarter earnings in connection with the US probe. It said the final settlement might exceed the current provision.
US authorities, which suspect tens of thousands of Americans of evading billions of dollars in taxes through Swiss private banks in recent years, have been conducting a widening criminal investigation into scores of Swiss banks, including Credit Suisse. Mario Tuor, a Swiss government spokesman, confirmed the request from the US authorities, and said these requests specifically concerned tax fraud, covered by the 1996 double taxation treaty between Switzerland and the United States. Switzerland and the United States have hammered out a tax agreement that would also cover tax evasion, which the US has yet to ratify.
At 0918 GMT, Credit Suisse shares were up 2.4 percent, in line with the broader European banking sector index. "In our view the US tax matter and data handover is advancing faster than expected which we believe is positive for Credit Suisse as we could potentially see a conclusion to this matter earlier than we previously expected," Vontobel analyst Teresa Nielsen said.
The Swiss government has been in talks with US authorities for months to secure a deal that would end investigations into US clients at 11 Swiss banks in return for payment of fines and the transfer of names of clients suspected of evading taxes. Switzerland managed to strike a deal with the US authorities in 2009 for UBS, which involved UBS paying a fine of $780 million, allowing it to avert criminal charges. It later also revealed details of around 4,450 clients. Earlier this month, Swiss finance minister Eveline Widmer-Schlumpf said talks with the United States had intensified and she expected a deal soon on the basis of existing double-taxation agreements.
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