March 31, 2010 / 4:46 PM / 9 years ago

Swiss readying UBS client data for handover to US

* Swiss govt provisionally approves deal to end US tax case

* Says not taking parliamentary backing for granted

* Says decision is so it can continue to process UBS data

* No data to be given to US without parliament’s consent

ZURICH, March 31 (Reuters) - The Swiss government said on it would continue to process information on U.S. client accounts from UBS (UBS.N)UBSN.VX in the run-up to a parliamentary vote on a deal to end a high-profile U.S. legal case against the bank.

The government wants parliament to override a Swiss court decision that prevents it from honouring an agreement struck with the United States last August to hand over data on 4,450 clients of UBS suspected of hiding money from the U.S. tax authorities by cementing the deal in law.

The government said on Wednesday had provisionally approved the deal but it would not hand over any of the data on UBS clients without parliament’s backing, except for cases in which clients had consented or had turned themselves in to U.S. tax authorities under a voluntary disclosure programme.

UBS, Switzerland’s largest wealth manager in terms of assets, has warned parliamentarians that failure to back the deal at the vote in June could mean the continuation of the bitter tax row between the U.S. and the bank, and could result in a damaging backlash for both Swiss banks and the Alpine nation’s economy. [ID:nLDE62B0G1]

The government said its provisional backing of the deal did not mean it took parliamentary approval for granted, only that it allowed it to continue to process the data so it would be able to hand them over in time if the agreement was approved.

“It would be impossible to complete all cases in parallel before the one-year deadline if application were delayed until after the June session of parliament,” it said.

LEGAL LOOPHOLE

Swiss bank secrecy laws prevent Berne from sharing tax information automatically with foreign authorities. Each request needs to follow an administrative process and clients of Swiss banks can appeal against a request for data transfer in court.

One such client of UBS won an appeal in January to prevent her account data being handed over to U.S. authorities. The Swiss court’s decision called into question the basis of the agreement to hand over the names as it ruled her behaviour did not constitute fraud.

UBS says it has kept its side of the deal, transferring more than 4,000 dossiers containing almost 4 million pages to Swiss authorities to hand on to their U.S. counterparts.

Switzerland’s right-wing SVP party said earlier this month it opposed retroactive parliamentary approval of the deal agreed between Berne and Washington in August. [ID:nLDE6282GJ]

The SVP, Switzerland’s biggest parliamentary party, does not hold enough seats to block approval in the lower house without the support of at least one other major party, but the government has no contingency plan should parliament not approve the deal.

UBS shares closed up 0.3 percent in Zurich, against a 0.6 percent dip in the stock of domestic rival Credit Suisse CSGN.VX and a 0.5 pct lower STOXX European banks index .SX7P. UBS was up 1.8 pct in New York at 1625 GMT. (Reporting by Jason Rhodes; editing by Karen Foster)

0 : 0
  • narrow-browser-and-phone
  • medium-browser-and-portrait-tablet
  • landscape-tablet
  • medium-wide-browser
  • wide-browser-and-larger
  • medium-browser-and-landscape-tablet
  • medium-wide-browser-and-larger
  • above-phone
  • portrait-tablet-and-above
  • above-portrait-tablet
  • landscape-tablet-and-above
  • landscape-tablet-and-medium-wide-browser
  • portrait-tablet-and-below
  • landscape-tablet-and-below