ZURICH, June 19 (Reuters) - Swiss upper house lawmakers keptalive a draft law aimed at ending a long-running U.S. tax probeinto hidden offshore accounts at Swiss banks on Wednesday,leaving the final say with the lower house, which has previouslyrejected it.
Lawmakers are deeply divided on a bill aimed at allowingbanks to sidestep strict Swiss secrecy laws by disclosing theirU.S. dealings to prosecutors, helping them to strike deals thatare nevertheless expected to include fines that could cost theindustry as much as $10 billion.
The Swiss government has warned that the bill's failure islikely to lead to criminal charges against Swiss banks byimpatient U.S. prosecutors.
With the draft law increasingly unlikely to be fast-trackedbefore the end of parliament's summer session on Friday,government officials and lawmakers scrambled to mitigate thepotential fallout for Swiss banks.
Upper house lawmakers issued a statement acknowledging thesituation's urgency and saying they were in favour of Swissbanks making amends for wrongdoing, a move they said they hopedwould appease U.S. officials.
The protection of client information has helped to makeSwitzerland the world's biggest offshore financial centre, with$2 trillion in assets. But the haven has come under fire asother countries have sought to plug budget deficits by clampingdown on tax evasion, with authorities probing Swiss banks inGermany and France as well as the United States.
U.S. authorities have more than a dozen banks under formalinvestigation, including Credit Suisse, Julius Baer, the Swiss arm of Britain's HSBC, privatelyheld Pictet in Geneva and local government-backed ZuercherKantonalbank and Basler Kantonalbank.
An indictment felled Wegelin & Co this year. The bank paid a$58 million fine and closed its doors for good after pleadingguilty to helping wealthy Americans evade taxes through secretaccounts.
Lower house lawmakers are set to take up debate again lateron Wednesday.
If the bill dies in parliament, the Swiss government couldstill take matters into its own hands and approve the datatransfer with an executive order, though circumventing a hostileparliament is seen as a gamble.
Switzerland's biggest bank, UBS, was forced in2009 to pay a fine of $780 million and deliver the names of morethan 4,000 clients to avoid indictment, giving the U.S.authorities information that allowed them to pursue other banks.