Swiss to fix UBS
Switzerland will ask parliament to turn a deal with Washington that got bank UBS off the hook in a tax evasion case into binding law, plugging a legal hole that is stopping Berne from honouring the agreement
Switzerland will ask parliament to turn a deal with Washington that got bank UBS off the hook in a tax evasion case into binding law, plugging a legal hole that is stopping Berne from honouring the agreement
To settle a bitter dispute, UBS and the Swiss government agreed in August to disclose 4,450 secret accounts that U.S. citizens used to hide money from tax authorities.
But the settlement hit a stumbling block after a Swiss court ruled in January that such a transfer of data would breach existing Swiss law.
The tax row and uncertainty surrounding the settlement has led to billions of Swiss francs of client withdrawals at UBS.
By asking its parliament to approve the deal, Switzerland would do away with a legal distinction between tax fraud and tax evasion in providing assistance to the US and be allowed to speedily deliver the data Washington is seeking.
“We will in this way uphold the international commitments made by Switzerland with a view of finding a definitive resolution to the legal and sovereignty conflict with the United States,” the Swiss government said in a statement.
The Swiss administrative court ruling caused embarrassment for the Swiss government as it risked prolonging a legal nightmare for its already hard-pressed bank giant.
UBS said in a statement it intended to fulfill all commitments under both a criminal and civil settlement of the tax row. This included providing relevant client account information to the Swiss tax authorities.
Swiss bank secrecy laws prevent Berne from automatically sharing tax information with foreign authorities. Each request needs to follow an administrative process and clients of Swiss banks can appeal against a request for data transfer in court.
