GENEVA - Swiss lawmakers refused on Tuesday to vote on a deal with the United States exposing US tax dodgers with assets in Swiss banks, risking a clash with Washington just as G8 leaders vow to crack down on secrecy.
At issue in the complex procedural wrangling is the extent to which Swiss banking secrecy, until recently widely seen as sacrosanct, will be prised open, exposing hidden accounts.
A stormy session of the Swiss lower house, or National Council, refused for the second time to hold an emergency debate on the controversial "Lex USA" deal, which Washington has demanded must come into force by July 1.
The deal is seen as crucial if Swiss banks are to escape the threat of a raft of lawsuits in the United States - with massive fines the price of legal peace - as well as being barred from the big and profitable American market.
But without a parliamentary green light, revealing the names of their US clients would put them in breach of Swiss banking secrecy laws.
Swiss banks are believed to hold accounts worth billions of dollars belonging to American citizens who have not declared these assets to US tax authorities.
With the global economic crisis putting tax havens into sharp focus - notably at the G8 summit in Northern Ireland this week - Switzerland has fought to defend the principle of banking secrecy by giving some ground.
Currently, US investigators have to make a formal request for legal assistance concerning a specific tax-dodger, a procedure seen as cumbersome in Washington.
The take-it-or-leave-it deal proposed by the US side, approved by the Swiss government at the end of May, involves lifting secrecy laws for US clients for one year.
The banks need parliamentary approval to reveal clients' names and which employees handled US business.
There has been anger across the Swiss political spectrum because details of the agreement will not be revealed until after it comes into force.