Swiss tax deal with US clears final hurdle

Jun 17, 2010, 13:53 GMT

Geneva - Switzerland's National Council approved Thursday a deal reached between Bern and Washington for disclosing UBS client data to US tax authorities, the final hurdle for the deal to take effect.

Approval came a week after the upper chamber, the Council of States, approved the agreement.

Under the deal reached by the two governments last year, Switzerland is to hand over data on some 4,500 clients to the US government agencies, in the largest lifting of the bank secrecy veil since it was legislated in 1934.

Individual clients would still have the right to take legal action to stop the disclosure of their data to the US.

UBS has welcomed the agreement, and said the data being sought would be made available by August.

Starting in 2008, when UBS was first openly accused of helping wealthy US clients avoid paying taxes, Switzerland has been facing increased pressure on its prized bank secrecy rules.

As the financial and economic crisis deepened, G20 countries became even more interested in recovering lost tax revenues from so- called tax havens.

In February 2009, Swiss regulators handed over data on some 250 UBS clients to US authorities and UBS was fined 780 million dollars. The next day, Washington announced it was widening the investigation to thousands more wealthy customers of the bank.

The deal on the 4,500 UBS accounts was reached last August as a kind of compromise meant to allow the Internal Revenue Service to crack bank secrecy but keep the bank away from litigation and in business in the US.

Initially, the IRS was seeking access to thd data of over 50,000 accounts held by US citizens.