Swiss Tax Protocol

Floor Speech

Mr. McCAIN. Madam President, I am pleased to join Senator Levin today in calling on the Senate to take up and pass by unanimous consent the Swiss tax protocol and other tax treaties pending before the Senate. The importance of these treaties cannot be overstated. They would aid U.S. companies by allowing for certainty in tax treatment when those companies engage in international commerce and trade by preventing double taxation and ensuring they have the backing of the Treasury Department in the case of conflicts with foreign tax authorities. Furthermore, they would allow our government to be on stronger footing in holding tax cheats accountable, an issue Senator Levin and I are particularly familiar with given our recent investigation, as chairman and ranking member on the Permanent Subcommittee on Investigations, into offshore tax schemes carried out by Credit Suisse. On the heels of that investigation, Credit Suisse recently paid a $2.6 billion fine and pled guilty to criminal charges, admitting to facilitating tax evasion for their U.S. clients.

Taking advantage of Switzerland's opaque banking practices, Credit Suisse became a safe haven for tax evasion. The clients seeking these services and the bank itself believed that they were, and would remain, outside the reach of U.S. tax authorities. The recent guilty plea proves that this belief was at least partly mistaken. This criminal penalty was a welcome development, but it was also lacking in several ways, including that, as part of the agreement, the U.S. government did not require the bank to turn over the names of the U.S. clients holding secret bank accounts with Credit Suisse. With more than 20,000 unidentified Americans having held accounts at Credit Suisse in Switzerland during the relevant period (most of whom never disclosed their accounts as required by U.S. law) this agreement provided no direct accountability for those taxes owed.

We need to ensure this does not happen again. The Swiss tax protocol we are discussing today would make it easier to get those names and account information. Working under the assumption that the United States would be unable to pierce the veil of Swiss bank secrecy, U.S. persons have secreted their money away in countries such as Switzerland for far too long. Passing this treaty is necessary to prove this assumption wrong and to deter future attempts at tax evasion. It will send a strong message to those who would consider violating U.S. tax laws that we enforce our laws, fairly and uniformly, and we have the tools at our disposal to do so.

At the Credit Suisse hearing, the bank's CEO, Brady Dougan, said, ``Credit Suisse is ready, at this moment, to provide the additional information about Swiss accounts requested by U.S. authorities but has been unable to do so because the U.S. Senate has not yet ratified the protocol.'' Let's call his bluff and remove anything that may stand in the way of allowing the bank to provide U.S. authorities with information about those accounts.

These routine and important tax treaties were reported out favorably by the Foreign Relations Committee on April 1. For all of these reasons, I urge the Senate to consider and pass these treaties.

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