Switzerland parliament passes US banking treaty

[JURIST] The Swiss Federal Assembly [official website] on Thursday gave final approval on an agreement [text, PDF] with the US that will allow Swiss bank UBS [corporate website; JURIST news archive] to disclose account information of clients suspected by the US government of tax evasion. The approval came at a conciliation meeting between the two houses of parliament at which the Swiss National Council [official website], the lower house of parliament, voted 81-63 [Bloomberg report] to drop its calls for a referendum [JURIST report] that would have delayed ratification of the treaty until some time in 2011. The agreement allows UBS to turn over information of 4,450 US clients to the US Internal Revenue Service (IRS) [official website] and may prevent the US Department of Justice (DOJ) [official website] from resuming a lawsuit against UBS in which it had sought the names of 52,000 UBS clients. The Swiss Federal Tax Administration [official website] has already sent the DOJ the information of 500 UBS clients [AP report] who signed waivers allowing the disclosure.

The National Council on Tuesday voted 81-61 to pass the treaty after rejecting it [JURIST report] last week. The tax conflict has already cost UBS $780 million in fines levied by the DOJ for its admitted assistance [BBC report] of US citizens in avoiding taxes. The agreement was before the parliament due to a court ruling in January, when the Swiss Federal Administrative Court [official website, in French] ruled [JURIST report] that an American taxpayer's financial information at UBS may not be disclosed to the IRS pursuant to an August 2009 agreement [JURIST report]. Also in January, the Federal Administrative Court ruled [JURIST report] that the Swiss Financial Market Supervisory Authority [official website, in German] violated the law in February 2009 when it ordered UBS to disclose information to the US on more than 250 of the bank's clients without the authority to do so. In September, the US and Switzerland signed a treaty [JURIST report] that would increase the amount of information shared between the two nations on would-be tax evaders. The agreement came one month after a Swiss banker and lawyer were indicted in US federal court [JURIST report] for helping clients hide assets. In March 2009, the Swiss announced their intention to adopt a more stringent definition [JURIST report] of tax evasion and to work with other countries to investigate such claims.

 

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