UBS UPDATE: SWISS PARLIAMENT GIVES FINAL APPROVAL TO RELEASE 4,450 BANK DEPOSIT INFORMATION OF US PERSONS
The Swiss parliament has finally given its approval to the settlement reach with the United States in attempting to resolve the UBS dispute for discovery of information related to US persons holding undisclosed bank accounts in Switzerland. The parliament has renounced a call to put the settlement for a voter referendum which had been called for by the lower house.Now, the agreement had been passed by both houses of the parliament, following a meeting last week of a settlement conference convened to work out differences between the two houses. In breaking the impasse, the lower house agreed to drop its demand for a referendum. In the end, many members of parliament abstained from the vote allowing the resolution for approval without a referendum to pass by a vote of 81 to 63 with 47 abstentions.
The August 19, 2009 settlement agreement, authorized the disclosure of client data, including client identiy, of 4,450 UBS accounts to resolve and settle the John Doe summons enforcement action pending in the Federal District for the Southern District of Florida. The deal required UBS make such disclosure. Parliamentary approval of the agreement became necessary following a January 21, 2010 adverse decision by the Swiss Federal Administrative Court holding that the agreement was insufficient to change the interpretation of "tax fraud and the like" as contained in the Switzerland-U.S. tax treaty.
Parliamentary approval of the agreement gives it the legal force of a treaty in Switzerland, allowing authorities to follow through with the disclosure of data on 4,450 UBS client accounts that was blocked by a January decision of the Federal Administrative Court. The court objected to the government's claim that the agreement could expand the definition of the treaty term "tax fraud and the like" to include long-term tax evasion.
Internal Revenue Service Commissioner Shulman stated in a press release that he was very pleased with the Swiss parliament’s decision and promised the IRS would "vigorously enforce the law" against offshore tax evaders.
The Swiss government said that following the approval of the agreement, "nothing stands in the way of UBS client details being disclosed" and that 1,200 cases are ready for immediate delivery. The Swiss Federal Tax Administration (SFTA) has also issued final decisions on 400 cases, with another 650 to follow shortly. Once a final decision has been issued, the subject individual is permitted to file an appeal within 30 days with the Federal Administrative Court.
It is reported that 500 disclosures have been made where U.S. clients of UBS consented to the release of their bank information. The remaining 1,450 cases are being processed by the Swiss taxing and should be completed by the agreement's August deadline.
