UBS Agreement Nears Parliamentary Approval

by Ulrika Lomas, Tax-News.com, Brussels

07 June 2010

A bill which could spell the end of banking secrecy in Switzerland inched nearer to parliamentary endorsement on June 3 after the upper house of the Swiss parliament approved the UBS settlement with US authorities.

The agreement, yet to be ratified by the lower house, will provide the US tax authority with confidential details of 4,450 of UBS’s US clients in order to prevent further criminal proceedings.

The settlement arrived in the upper house, following approval from the parliamentary select committee on June 3, but the committee urged a referendum on the matter. In its plenary, the upper house gave the bill majority support, with 31 votes in favour and 12 against. The chamber, however, voted against the committee’s proposals for a public referendum, instead calling for it to be adopted without delay, before the August deadline for a final deal to be struck.

The bill will now be tabled in the lower house of the Swiss parliament – the Federal assembly – for final approval where it is expected to meet with greater opposition. However, despite initial concerns about the bill’s ramifications for the Swiss financial centre amongst opposition political parties, it has been generally accepted that there is little choice but to adopt it. Most recently, in May, the right-wing SVP reversed its objection to the bill, and indicated that it may be voting in favour.

In August 2009 UBS agreed to a fine of USD780m and to transfer data on the accounts of those accused of evading US taxes to the Internal Revenue Service, although the final number to be handed over is far short of the 52,000 names originally sought.

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