* Key step towards removal from tax haven list
* Ministry says deal never depended on solving UBS case
* US govt is suing UBS to retrieve client data
* UBS shares rise after the news
(Adds US comment, updates shares)
By Sam Cage and Sven Egenter
ZURICH, June 19 Switzerland and the United
States have reached agreement on a double taxation treaty, the
Swiss finance ministry said on Friday, a key step towards
removal from a 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 allow it to be removed from an OECD
"grey list" of states which need to improve tax cooperation and
avoid possible sanctions from G20 nations. [ID:nLF492254]
Talks with Washington are particularly crucial for Berne as
U.S. authorities have accused Swiss bank UBS UBSN.VX (UBS.N)
of helping rich clients to hide money in secret Swiss accounts.
UBS is losing clients because of the bad publicity.
While the Swiss-U.S. agreement had never been dependent on
solving the case against UBS, it could prove difficult to force
through parliament without a solution, a spokesman for the Swiss
Finance Ministry said.
UBS shares reversed losses after the news and were 0.6
percent lower at 14.42 Swiss francs by 1514 GMT, behind a 1.6
percent higher European banking sector .SX7P.
"That has brought hope that a solution for the UBS tax
dispute will be found soon," one trader said.
"It's good news, in a way, that there are discussions," said
Teresa Nielsen, an analyst at bank Vontobel. "But we would
probably have to get more details on what is actually in the
double tax agreement."
UBS declined to comment.
Under pressure from the G20, Switzerland agreed in March to
relax its prized bank secrecy and accepted for the first time to
share certain bank client data with other jurisdictions once
bilateral tax treaties are ratified.
The U.S. deal is in compliance with OECD guidelines, the
"The decision will permit an exchange of information on tax
matters in individual cases where a specific and justified
request has been made," it said in a statement.
It is the sixth such agreement the Swiss have struck, after
Denmark, Norway, France, Mexico and one other unnamed country.
The U.S. Treasury confirmed it reached a deal with the Swiss
government to revise a two-way income tax treaty to boost an
information exchange aimed at combating tax evasion through
"This treaty will increase our ability to enforce our tax
laws and will help bring an end to an era of offshore accounts
and investments being used for tax evasion," U.S. Treasury
Secretary Timothy Geithner said in a statement.
The Treasury's statement made no mention of the UBS case.
The U.S. government is suing UBS to retrieve thousands of
names of American clients who allegedly stashed money in secret
accounts in contravention of U.S. tax laws.
UBS is fighting the civil suit and says compliance would
require its employees to commit fraud in Switzerland, which
jealously defends its bank secrecy legislation.
The bank settled with the U.S. Department of Justice in
February to avoid criminal charges by agreeing to pay a $780
million fine and providing a certain number of U.S. account
UBS has pledged to transfer all its U.S. offshore clients to
onshore accounts in the United States, removing another barrier
to cutting a deal.
(Additional reporting by Albert Schmieder in Zurich and Kim
Dixon and David Lawder in Washington, editing by David Jones and