Tags: EU | Switzerland | UBS | Tax | Evasion

Swiss Parliament Approves US-UBS Tax Deal

Thursday, 17 Jun 2010 03:11 PM

 

Share:
  Comment  |
   Contact Us  |
  Print  
|  A   A  
  Copy Shortlink

Swiss lawmakers on Thursday gave final approval to a treaty with the United States that will hand Washington thousands of files on suspected tax cheats, agreeing to drop plans to allow a referendum on the issue.

Parliament's upper and lower house agreed that there will be no possibility of referendum on the deal that will see the country's biggest bank, UBS AG, divulge the names of 4,450 American clients suspected of tax evasion to U.S. authorities.

The agreement between both houses secured final approval of the treaty, which the government hopes will eventually end UBS's three-year battle with U.S. tax authorities that culminated in revelations the bank had for years helped American clients hide millions of dollars in offshore accounts.

UBS chief executive Oswald Gruebel welcomed the decision.

"I and the whole bank thank the Federal Council and those parliamentarians who worked to find a solution to this issue," he said in a statement.

Shares in UBS went up 2.7 percent by noon at 15.93 Swiss francs ($14.10) on the Zurich exchange.

The lower house voted 81-63 to drop its earlier demand that Swiss voters should be allowed to approve the deal in a referendum before it comes law. Forty-seven lawmakers abstained.

A popular ballot would have made Switzerland miss a late August deadline to hand over all 4,450 names because the vote would have been held in November at the earliest.

"Nothing now stands in the way of UBS client details being disclosed in cases where the decision handed down has taken legal effect," said the Swiss Justice Ministry in a statement.

The deal is crucial to UBS, which has faced intense pressure from U.S. authorities since 2007. Last year the bank agreed to turn over hundreds of client files and pay a $780 million penalty in return for a deferred prosecution agreement. But Washington has signaled that unless UBS reveals the further 4,450 American names demanded in the U.S.-Swiss agreement, it may face a crippling civil investigation just at a time when the bank is recovering from the subprime crisis and seeking to rebuild its U.S. business.

Swiss authorities have already transmitted the names of about 400 UBS clients who signed waivers as part of the International Revenue Service's voluntary disclosure program, according the Swiss Federal Tax Administration. A further 100 UBS clients gave their consent directly to Swiss authorities.

The Swiss Banker's Association said it was pleased with parliament's decision "because it means Switzerland can at last deliver what it promised in the agreement of last August," said spokesman James Nason.

He rejected the suggestion that Swiss banks might now suffer an exodus of foreign clients fearful their details could be divulged next. "We've got no indications that's going to happen."

Martin Naville, chief executive of the Swiss-American Chamber of Commerce, which has 2,450 members, said "a public vote with all those emotional topics would have been a tricky thing."

Among the risks Swiss companies would have faced had the treaty been further delayed or even voted down were general insecurity, greater scrutiny by the IRS, and a refusal by Congress to ratify a new double taxation agreement that is vital to businesses operating in both countries, said Naville.

"Had this been rejected we would also have put ourselves on top of the list of tax havens, whether justified or not," Naville added.

But Naville said the decision was only one in a series of course changes taken by Switzerland on banking secrecy in recent year.

The country's political and business leaders had realized long ago that "the time to hide money in Switzerland is over," he said.

© Copyright 2014 The Associated Press. All rights reserved. This material may not be published, broadcast, rewritten or redistributed.

Share:
  Comment  |
   Contact Us  |
  Print  
  Copy Shortlink
Around the Web

Join the Newsmax Community
Please review Community Guidelines before posting a comment.
>> Register to share your comments with the community.
>> Login if you are already a member.
blog comments powered by Disqus
 
Email:
Country
Zip Code:
Privacy: We never share your email.
 

You May Also Like
Around the Web

Most Commented

Newsmax, Moneynews, Newsmax Health, and Independent. American. are registered trademarks of Newsmax Media, Inc. Newsmax TV, and Newsmax World are trademarks of Newsmax Media, Inc.

MONEYNEWS.COM
© Newsmax Media, Inc.
All Rights Reserved