Switzerland has decided it will not hand over private bank data to the United States as demanded in a letter to the Swiss government published in two Swiss newspapers on August 31 from US Deputy Attorney General James Cole.

Swiss Foreign Minister Micheline Calmy-Rey who also holds the rotating post as Swiss president this year, said “No bank client data has been transferred to the United States. Switzerland will not give any other details on the ongoing negotiations.” She added that any transfer of information on banking clientele would be “based on existing legislation," or the double taxation agreement between the two countries.

Earlier, Swiss Finance Minister Eveline Widmer-Schlumpf suggested a solution for resolving US concerns could be found “based on existing fiscal agreements between the US and Switzerland or on recent agreements with Germany and the United Kingdom.”

The two agreements, finalized in August, would call for Swiss banks to levy a withholding tax on income earned on the assets of foreign account holders while getting around a requirement for an automatic exchange of information.  A new double taxation agreement between Switzerland and the US is pending approval by Washington.

Last year the Swiss parliament approved a deal permitting Swiss banking giant UBS to provide the names of some 4,500 US citizens suspected of hiding millions of dollars to avoid paying US taxes.

But Swiss bankers are concerned about the possibility of another UBS-type deal and have called for a universal treaty binding all countries. “The solution must be globally applicable, definitive and in line with current Swiss laws,” said Patrick Odier, chairman of the Swiss Bankers Association.

“The US must recognize that legal certainty is something Switzerland must guarantee,” he said, referring to Swiss bank secrecy laws that require banks to share information in cases of serious criminal acts or tax fraud but not tax evasion.

The Swiss Financial Market Supervisory Authority has calculated that banking secrecy has helped Switzerland build a $2-trillion offshore financial industry, $20-30 billion from US citizens.