The Swiss cabinet has approved an amendment to a tax agreement with the United States to ensure bank clients are properly informed of requests for data on suspected tax dodgers.

The move comes as Switzerland finds itself under increasing pressure from the US to hand over more information on banking clients suspected of evading taxes.

The 1996 double taxation agreement between the two countries did not cover the current US practice of demanding data of batches of unnamed banking clients. Switzerland feared that such clients would not be given sufficient time to launch a defence against the handover.

“The amendment should ensure that the procedural rights of affected persons domiciled in the US remain guaranteed," the government said in a statement.

In 2009, Switzerland agreed to hand over the names of 4,450 UBS clients following an investigation into the bank. Some 400 appealed to the courts in Switzerland, with 100 cases being upheld.

In some cases, the court ruled that the banking clients had not been given sufficient opportunity to seek a legal challenge to their data being transferred to the US.

The US has recently demanded that Credit Suisse hands over the names of many US clients with assets at the bank. Credit Suisse has written to the clients involved to warn them of potential investigations into their affairs.

With up to ten other Swiss banks being threatened with the same procedure, the government decided to make it compulsory under the tax agreement to keep clients fully informed.

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