Swiss agree to reveal US tax cheats
By Eliane Engeler |
June 18, 2010, Friday
|
Print Edition
Print Edition
SWISS lawmakers yesterday gave final approval to a treaty with the United States that will hand Washington thousands of files on suspected tax cheats.
In the process, Geneva agreed to drop plans to allow a referendum on the issue.
Parliament's Upper and Lower House agreed that there would be no 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 US 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 US 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.
Shares in UBS went up 2.7 percent by noon yesterday to 15.93 Swiss francs (US$14.10) on the Zurich Stock 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 is enacted. 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," the Swiss Justice Ministry said.
The deal is crucial to UBS, which has faced intense pressure from US authorities since 2007.
Last year the bank agreed to turn over hundreds of client files and pay a US$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 US-Swiss agreement, it may face a crippling civil investigation.
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 the decision.
In the process, Geneva agreed to drop plans to allow a referendum on the issue.
Parliament's Upper and Lower House agreed that there would be no 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 US 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 US 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.
Shares in UBS went up 2.7 percent by noon yesterday to 15.93 Swiss francs (US$14.10) on the Zurich Stock 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 is enacted. 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," the Swiss Justice Ministry said.
The deal is crucial to UBS, which has faced intense pressure from US authorities since 2007.
Last year the bank agreed to turn over hundreds of client files and pay a US$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 US-Swiss agreement, it may face a crippling civil investigation.
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 the decision.
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