Credit Suisse and Julius Baer, the largest Swiss banks embroiled in a U.S. tax-evasion probe, may face delays in reaching settlements after the Swiss Parliament rejected a bill that would have freed the industry to send information to the U.S.
Bloomberg reports that the two firms, among at least 14 Swiss financial firms investigated by the Department of Justice since 2011 for allegedly helping Americans hide money from the Internal Revenue Service, are seeking to strike individual agreements to avoid or defer prosecution by the U.S.
The government bill, supported by Swiss banks, was aimed at helping firms not yet part of the U.S. probe avoid an indictment like that of Wegelin & Co., which pleaded guilty in January to helping American clients dodge taxes. While Credit Suisse and Julius Baer can already share some data with U.S. authorities, lawmakers’ rejection of the bill may complicate matters for them.
'The U.S. will simply start to play hardball', said Christopher Wheeler, a London-based analyst at Mediobanca SpA. 'The question is whether Credit Suisse and Julius Baer will get hurt because they’re actually negotiating their own deferred prosecution agreements, or does the whole thing just grind to a halt where the U.S. says we’re going to leave it hanging over you and wait till Switzerland sorts itself out'.
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