July 26, 2009 / 11:20 AM / 8 years ago

U.S. probe targets UBS banker visits: report

<p>The logo of Swiss bank UBS is seen at the company's office at the Bahnhofstrasse in Zurich in this July 1, 2009 file photo.Arnd Wiegmann/Files</p>

GENEVA (Reuters) - U.S. authorities are targeting client visits by Swiss-based bankers from UBS in their efforts to identify U.S. citizens with accounts at the bank who may have evaded tax, a Swiss newspaper said on Sunday.

U.S. tax authorities want to force UBS to disclose the identity of an estimated 52,000 U.S. holders of secret Swiss accounts suspected of dodging taxes, even though this breaches Swiss bank secrecy laws.

A possible compromise involving the names of account-holders visited by Swiss bankers would identify about 10,000 people, Swiss weekly Sonntags-Zeitung said.

A UBS spokesman declined to comment, noting the negotiations were a matter for the two governments. A Swiss Justice Department spokesman said the two sides had agreed not to comment while negotiations continued.

A trial against UBS had been scheduled to start in Miami on July 13, but presiding judge Alan Gold agreed to delay it until August 3 to allow time for a settlement.

On Friday a source familiar with the situation said talks between Switzerland and the United States to end the tax row could stretch beyond the August 3 deadline.

A status call between Gold and lawyers from UBS and the U.S. Internal Revenue Service on July 29 could be an opportunity for an announcement of a delay. A meeting between Swiss Finance Minister Micheline Calmy-Rey and U.S. Secretary of State Hillary Clinton is also scheduled on July 31.

NAMING NAMES, PROTECTING SECRETS

The challenge for the two sides is to find a way for Switzerland to hand over enough information to satisfy the U.S. tax authorities without infringing Switzerland's strict laws protecting banking secrecy.

Sonntags-Zeitung, citing a U.S. source familiar with the negotiations, said one solution would be to draw on the existing double taxation agreement between Switzerland and the U.S., which allows Swiss authorities to provide official assistance to Washington to help in a criminal investigation.

It said the U.S. justice department would seek the names of all U.S. customers of UBS visited by bankers from Switzerland between 2001 and 2007.

UBS's U.S. offshore business employed around 60 customer advisers in Switzerland, the paper said.

According to a U.S. Senate committee report last year, each of these advisers visited the U.S. up to three times a year, meeting about four customers a day on a trip lasting up to three weeks, resulting in about 10,000 customer contacts a year.

Since UBS has already admitted that its efforts to solicit offshore business broke U.S. law, the U.S. authorities could demand this information without infringing Swiss banking secrecy, which would not be the case if they simply asked for the names of account-holders without any justified suspicion.

UBS settled related tax-fraud criminal charges when it agreed in February to pay $780 million and to exit its U.S. offshore banking business.

The settlement was seen as a serious blow to Swiss bank secrecy as the bank agreed to hand over around 250 names of American clients.

Another Swiss paper, Sonntag, said Andreas Rued, a lawyer representing eight clients, would sue for compensation if Switzerland's top court found the Swiss government acted illegally in ordering UBS to hand over those names.

Rued could not be reached for comment.

The Swiss bank, which has already said it will report another quarterly loss on August 4, needs to put the tax litigation behind it to focus on restructuring and regain client confidence.

Reporting by Jonathan Lynn, editing by Will Waterman

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