UBS warns US deal flop could hurt Swiss banks
ZURICH: Swiss bank UBS is pressing Swiss lawmakers to endorse a deal settling tax evasion litigation with the United States, warning that 20 other Swiss banks could be targeted if it fell through.
In a document on Friday, UBS told parliament that accepting the deal was “in the interest of the Swiss economy.” It noted that US tax authorities had sought information about 20 Swiss banks under a general disclosure programme.
“It is absolutely possible that the IRS (US Internal Revenue Service) would also seek information related to other clients from these banks. The refusal from the Swiss (to ratify the deal)... could send a signal, to escalate these cases,” it warned.
UBS, the US and Swiss governments in August reached an agreement which requires the bank to reveal the identities of some 4,450 American account holders suspected of having evaded US taxes.
In return, US authorities would drop their lawsuit against the bank.
However, the Swiss federal administrative court in January upheld an appeal by an American client of UBS against the transfer of banking details to the US authorities, effectively blocking the August deal.
The court ruled that the 2009 agreement between the US and Swiss governments could not overwrite rules set out in an existing Swiss-US dual taxation agreement. The government is therefore seeking parliamentary approval of the deal so that it would stand up in court with a status equivalent to a treaty.