September 12, 2013 - The Swiss parliament approved on Monday a new agreement with the U.S.A. under which Swiss banks, including about 100 second-tier banks, will now have to turn over information about American account holders to the U.S. government.

The banks must pay penalties, disclose their cross-border activities, give detailed account information on U.S. clients and cooperate in requests for information under the U.S. - Swiss Income Tax Treaty. Banks that don't come forward by the December 31 deadline could face criminal charges.

In addition, the banks will have to inform the U.S. authorities about so-called leavers, or U.S. customers who shifted assets to other countries or banks.

In a statement last week on the agreement, the U.S. Justice Department noted that its tax enforcement activities are global and have included actions undertaken in India, Luxembourg, Israel and Caribbean countries.

The U.S. - Swiss agreement will give Swiss banks a chance to avoid or defer prosecution if they provide information about U.S. account holders.

UBS Switzerland's largest bank, avoided prosecution by paying $780 million in 2009, admitting it aided U.S. tax evasion and handing over data on 4,500 accounts.

Wegelin & Co., the oldest Swiss private bank, pleaded guilty in January of this year and paid $74 million.

The U.S. authorities are pursuing taxpayers, lawyers and bankers who set up secret accounts after the UBS deal was announced in February 2009.

The new agreement outlines escalating penalties after that time for banks that seek to avoid prosecution.

Banks must pay 20% of the value of accounts not disclosed to the IRS on August 1, 2008; 30% for such accounts opened between August 1, 2008 and February 1, 2009; and 50% for accounts opened after February 1, 2009. Total penalties by banks to avoid prosecution are expected to exceed $1 billion.

The deal is not available to fourteen financial institutions including Credit Suisse, HSBC and Julius Baer which are under criminal investigation.

U.S. prosecutors are hoping the renewed pressure on banks will drive U.S. taxpayers into the IRS's voluntary disclosure program, which allows taxpayers to come clean about all of their assets abroad, pay a penalty and avoid prosecution.