July 8, 2009 / 6:07 PM / 8 years ago

UBS deal important to U.S. double tax deal-Leuthard

NEW YORK, July 8 (Reuters) - The Swiss Parliament may not approve a double taxation treaty between Switzerland and the United States if the legal action against Swiss bank UBS UBSN.VX is not resolved, Swiss minister for economic affairs Leuthard said on Wednesday.

"Chances of approval (by the Swiss parliament) will be small if the legal action against Switzerland's biggest bank, UBS, will not be solved," Leuthard said in prepared remarks before the Swiss-American Chamber of Commerce in New York.

U.S. authorities have accused Swiss bank UBS of helping rich clients to hide money in secret Swiss accounts, and the case has damaged the UBS brand.

Switzerland and the United States reached an agreement last month on a double taxation treaty, which was a key step towards removal from an OECD list of tax havens.

Switzerland, whose private banks manage around $2 trillion of foreign wealth, aims to secure 12 new bilateral tax deals by the end of 2009 which could enable it to be removed from an OECD "grey list" of states which need to improve tax cooperation and avoid possible sanctions from G20 nations.

But the impasse on UBS could be snag on the tax deal's approval by Parliament.

"There are established procedures and authorised channels for sharing information," Leuthard said. "This unilateral attempt to compel the release of information is not covered by any existing international treaty and it would moreover force Swiss companies to break Swiss law."

Swiss law prohibits banks passing on client information to foreign authorities.

Leuthard stressed that Switzerland is keen on a "mutually satisfying conclusion of this matter (regarding UBS)" and that she was hoping for an "extra-judicial settlement".

She also emphasised Switzerland "is not and has never been a tax haven." She added that the country has an "open and transparent" tax regime, which is in strong contrast to actual offshore centers. (Reporting by Gertrude Chavez-Dreyfuss; Editing by Chizu Nomiyama)

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