“The US Internal Revenue Service recently submitted a request for administrative assistance to the Swiss Federal Tax Administration pursuant to the 1996 double tax treaty between Switzerland and the USA, seeking information with regards to accounts of domiciliary companies belonging to certain US persons as beneficial owners (the Treaty Request). In connection with the IRS Treaty Request, the SFTA has issued an order directing Clariden Leu to submit responsive account information to the SFTA,” a statement from the bank said.

Clariden Leu, which is part of Credit Suisse, Switzerland’s second biggest bank, has contacted clients via letter from its Zurich headquarters about the matter, Reuters reported. Its client notification uses almost identical language to that of Credit Suisse.

As described by WealthBriefing this week, the development highlights the remorseless erosion of Switzerland’s historic bank secrecy laws. Tax evasion, which is a crime in countries such as the US and UK, is not so regarded in Switzerland, while it does treat tax fraud as an offence. A number of Swiss banks, including Credit Suisse, UBS, Julius Baer and Wegelin, no longer provide offshore banking to US clients.

Switzerland is trying to agree a disclosure and information exchange deal with the US that would include its entire banking industry of some 355 banks. Meanwhile, Germany and the UK have recently signed tax disclosure pacts with the Alpine state.

Meanwhile, a Swiss parliamentary commission yesterday recommended lawmakers back a proposal clarifying how the Alpine state would hand over such client data.

The proposal is designed to reinforce a double tax pact already reached between Switzerland and the US.

The decline of banking secrecy, not just in Switzerland but in other jurisdictions, will force banks that had enjoyed fat margins from such low-maintenance business to work harder to provide a genuine value proposition in a more transparent world, industry figures have said. (To view an analysis of the issue, click here).