Eleventh-hour talks on July 31 between the US and Switzerland have spurred an “agreement in principle” in an ongoing dispute to force UBS to divulge the names of 52,000 offshore account holders. The deal comes after the US Department of Justice last week said it would press ahead with legal action on August 3 after diplomatic efforts to reach an agreement had failed.
Negotiations are continuing to finalize the details of the agreement. A full statement is expected on August 7. An evidentiary hearing has been scheduled for August 10 should the deal fall through.
US law states that taxpayers must disclose to the Inland Revenue Service (IRS) offshore accounts exceeding USD10,000. In its recent drive to demonise tax havens, a tactic apparently aimed at diverting attention from its own internal fiscal mismanagement, the US has focused its attention on UBS in an effort to gain access to details of the bank’s offshore account holders. In February, legal action resulted in UBS agreeing to pay USD780m in a related tax dispute, as well as handing over around 250 names to US authorities and agreeing to close its offshore business offerings to US clients.
UBS and the Swiss government have made every effort to avoid the disclosure of US account holders due to strict banking confidentiality legislation. Other banks and offshore jurisdictions are watching the case closely.
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