[JURIST] The Swiss Federal Administrative Court [official website, in German] announced [press release] Monday that an agreement [text, PDF] with the US, allowing Swiss bank UBS [corporate website; JURIST news archive] to disclose account information of clients suspected by the US government of tax evasion, is binding. The agreement, approved last month [JURIST report] by the Swiss parliament, 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 court also announced that they have rejected a challenge to the law by a UBS client who had objected to the data transfer. In announcing its ruling, the court noted the importance of the US-Swiss agreement, saying “the economic interests of Switzerland as well as the interests in fulfilling obligations that have been entered into in international law are of major significance and outweigh the individual interests of the complainant in this case.” The ruling could potentially affect 100 other appeals from UBS clients [Bloomberg report], which are currently pending.
The US-Swiss agreement was before the Swiss parliament due to a court ruling in January, when the Federal Administrative Court 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.