Reuters reports that Switzerland’s top court has made the ruling that the government can transfer bank records of American clients of Credit Suisse (NYSE:CS) to U.S. tax authorities. As a result, Switzerland hopes to put a stop to U.S. investigations of Swiss banks, which have come to be known as tax havens for rich and powerful Americans.
The ruling is the latest move by Switzerland to stop, or at least minimize, U.S. investigations into the country’s banks. It is expected to result in up to $10 billion in fines and will include the transfer of all the names of Americans suspected of tax evasion. The newest ruling is the result of the U.S.’s most recent request for the information of those suspected of evading taxes in the United States — the earlier request was denied by Swiss courts.
Along with Credit Suisse, the U.S. is formally investigating over a dozen banks including Julius Baer, the Swiss arm of Britain’s HSBC, and state-backed regional banks Zuercher and Basler.
The agreement means that banks may seek permission to hand over data in order to avoid U.S. criminal charges — this includes information regarding bank staff. However, they will not be allowed to hand over client names directly. The Swiss government will treat U.S. requests for client information as double taxation treaties.
While Switzerland has had long-standing bank secrecy laws, the court explained that the U.S.’s request was ”detailed enough to show grounds for suspecting tax fraud or similar offences and to allow the identification of the wanted persons,” and ”was not a fishing expedition.” A spokesman for the Swiss finance ministry says that the information ”can now be transmitted” to the Americans, following the ruling.
Historically, Swiss banks are thought to have accepted billions in undeclared American assets, though they no longer accept such money.