Tax demand

US officials demanded information about Americans believed to be using Swiss bank accounts to avoid paying taxes, following both Britain and Germany in doing so, Swiss media reported over the weekend.

Washington is threatening to file charges against Swiss banks if they do not does not comply, according to the Swiss newspapers SonntagsZeitung and NZZ am Sonntag.

SonntagsZeitung reported that it had received a copy of a letter sent by US Deputy Attorney General James Cole to the Swiss diplomat Michael Ambühl demanding to know how many Americans had evaded US taxes by putting money into Swiss accounts.

Cole had demanded detailed information from Credit Suisse and nine other smaller Swiss banks in the letter, which was dated August 31, the report said.

Last year, the Swiss government allowed the bank UBS to flout normal secrecy rules - and avoid prosecution in the US - by publishing the names of 4,500 investors.

Long tradition of secrecy

In response to the SonntagsZeitung report, a spokesman for the Swiss department for international financial affairs said that Berne was in contact with the United States. The government can permit the banks to get around established secrecy rules.

"We are seeking a solution on the basis of existing laws," said the spokesman, Mario Tuor.

In a landmark US case two years ago, UBS was made to hand over names of thousands of Americans holding accounts - and ordered to pay a $780 million fine (550 million euros).

The case rattled the Swiss financial establishment, which has a long tradition of secrecy that has allowed it to build up a thriving offshore banking industry.

Berne recently agreed to provide greater assistance to British and German tax authorities about their citizens who have Swiss accounts.

Author: Richard Connor (AP, Reuters)
Editor: Nancy Isenson