Swiss parliament votes against UBS client disclosure
10 June 2010
The Swiss parliament's lower house has rejected a government
plan to allow UBS to disclose its American client accounts to the
UBS has been pursued by the US Department of Justice (DoJ) and
Internal Revenue Service since at least May 2008. In that month
Bradley Birkenfeld, a former employee of UBS's American subsidiary,
confessed to helping thousands of wealthy Americans avoid tax by
setting up Swiss accounts.
In 2009, in order to escape a lawsuit brought by the DoJ, UBS
agreed to hand over the names of more than 4,000 of its American
clients. This agreement breached bank secrecy laws and so had to be
approved by the Swiss authorities. The Swiss federal government
duly rubber-stamped it in August 2009.
However, the country's courts, and now its parliament, have been
less co-operative, and have held up at least some of the
disclosures for many months. Several UBS clients' appeals have been
upheld in the courts, and earlier this month a parliamentary
committee recommended that no more disclosures should take place
without a national referendum.
The lower house - the National Council - has decided to follow
this recommendation. On Tuesday 8 June it voted 104-76 to reject
the disclosure deal unless a referendum - which would take at
least three months - is carried out.
Even the Swiss Bankers Association is unhappy at the National
Council's decision, which it said "has unfortunately done a
disservice to Switzerland’s standing as an economic and financial
centre ... party political calculations took priority over the
Further negotiations with parliament's upper house (which has
approved the disclosure agreement) will now be needed to resolve
the deadlock. A final vote is expected on 18 June.