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Defence minister criticises "unreliable" US

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Swiss Defence Minister Ueli Maurer has described the United States as an "unreliable negotiating partner" in the diplomatic spat over tax evasion.

This content was published on July 5, 2009 - 12:27

Maurer told a Sunday newspaper that Switzerland must insist on the law and not buckle – "better to lose with dignity than make concessions with the powerful", he said.

Maurer, a member of the rightwing Swiss People's Party, claimed there were serious internal tensions within the US government and said it was "logical" that the US would concentrate on criticising other countries in order to distract from its own problems.

"If we admit that in Switzerland things aren't exactly running ideally, we must also admit that Obama's government is out of step," he said.

"Switzerland could turn the argument and say that it's practically impossible to negotiate with a government that has brought such difficulties on itself."

In addition Maurer didn't rule out bringing up the issue of Switzerland accepting former detainees of the Guantánamo naval base constructed by the US on Cuba.

Swiss Foreign Minister Micheline Calmy-Rey has previously said Switzerland is prepared to receive "one or two" former prisoners.

UBS accounts

Last week the United States said it would continue its lawsuit against UBS, Switzerland's second-largest bank, to try to force it to identify thousands of US clients with confidential UBS accounts.

The Justice Department said in a brief filed with a Miami court on June 30 that it was pressing ahead with its case to reveal information about 52,000 Americans suspected of using the bank to hide nearly $15 billion (SFr16.3 billion) in assets and evade US taxes.

UBS has consistently said that enforcement of the US summons would require the bank to violate Swiss legislation on banking secrecy and was inconsistent with US-Swiss treaties.

Swiss banks are increasingly turning down business from potential customers in the United States fearing legal problems and a mass of red tape. There has also been anecdotal evidence in the Swiss media of US citizens living in Switzerland being turned away by Swiss banks.

The Swiss authorities have also said the US case violated the sovereignty of another state and should therefore not be pursued.

So far, there are precious few signs that the US will accept a deal even though a revised double taxation treaty has been agreed with Switzerland.

The case will reach a pivotal point on July 13 unless a diplomatic solution can be found.

swissinfo.ch and agencies

UBS and the US

On May 14, 2008, former UBS employee Bradley Birkenfeld and a Liechtenstein businessman were charged by the US authorities with helping an American billionaire avoid paying taxes on $200 million of assets deposited in Swiss and Liechtenstein bank accounts.

Birkenfeld turned whistleblower, giving details of UBS private banking practices to US prosecutors.

In July, a Miami court authorised the Internal Revenue Service to issue a summons on UBS demanding the release of confidential information on clients the agency suspected of tax evasion.

In the same month, UBS told a congressional hearing that it would stop offshore banking activities for US clients.

UBS agreed to pay $780 million and name some United States clients to resolve criminal fraud charges against it.

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