Official calls for US cooperation on UBS
A senior Swiss foreign ministry official has urged the United States to refrain from taking unilateral action against Swiss banking giant UBS in a tax probe.
State Secretary for Foreign Affairs Michael Ambühl made the comments during a trip to the US. He also used the occasion to make contact with the teams of the two presidential candidates.
The US authorities are currently investigating alleged income tax evasion by wealthy Americans linked to UBS.
Earlier this month a court order was won obliging the bank to produce details of its services to US clients from 2000 to 2007. This has raised questions over whether this could threaten Switzerland’s traditional banking secrecy.
“I have reaffirmed the offer of the Swiss government to cooperate with US authorities under the existing legal bases,” Ambühl told swissinfo after talks in Washington with his American counterpart, William J. Burns.
“We expect that, in order to receive information from Switzerland, no unilateral measures will be taken against UBS so long as there is cooperation,” said Ambühl at the conclusion of his two-day visit on Friday.
The probe has been aided by information from a former UBS employee, Bradley Birkenfeld, who admitted during a separate criminal case in the US to assisting tax evasion while at the bank.
UBS has said that it takes the matter “very seriously” was “working diligently with both Swiss and US government authorities, consistent with Swiss law and the legal frameworks for intergovernmental cooperation and assistance”. But it has not yet explicitly said it will comply with the court order.
The Swiss finance ministry has reportedly not yet received any formal request for judicial cooperation from the US over the affair.
Iran issue
Ambühl and Burns also discussed a controversial Swiss-Iranian gas export agreement.
The deal, between private Swiss energy company EGL and Iran, was signed in Tehran in the presence of the Swiss foreign minister, Micheline Calmy-Rey in March.
It has caused an outcry in the US, with White House official Kurt Volker telling swissinfo in an interview earlier this week that the 25-year export pact was a “mistake”.
Burns reaffirmed his country’s concern over the arrangement but admitted that it did not violate United Nations sanctions, Ambühl said.
The Swiss diplomat added that the deal would not even infringe the US law on sanctions against Iran, as voted on by the US Congress.
“The contract was not concluded by the Swiss government, but by a private company and it responds to Swiss long-term strategic interests in diversifying its energy supply,” reiterated Ambühl.
Future relations
Fears that Switzerland would lose its good offices – representing US interests in Iran – were unjustified and the issue “had not been called into question”, said the official.
The US and Iran broke off diplomatic relations in 1980.
Ambühl also met political advisors for the two presidential candidates, the Republican John McCain and Democrat Barack Obama.
Both Democrat Robert Gelbard amd Republican Richard Armitage are old hands in international affairs and are well known in Swiss diplomatic circles.
The state secretary said the advisors were well informed and interested in Switzerland. Both candidates’ foreign policy programmes were, however, “marked by nuances that are to be expected,” he said.
There would be changes after President Bush departs after the election on November 4, Ambühl added, but how this would pan out would remain to be seen.
swissinfo, Marie-Christine Bonzom in Washington and agencies
Former UBS employee Bradley Birkenfeld, a Liechtenstein national Mario Staggl and other “known and unknown” individuals were indicted for assisting tax evasion in May.
Birkenfeld initially denied the accusation, but changed his plea last month while providing prosecutors with details of his actions. He also said UBS had “incentivised” him to help clients evade tax.
In the meantime, the Internal Revenue Service (IRS) and Department of Justice launched an investigation into the operations of UBS. Senior Swiss banking and government officials soon met with the US authorities, but the details of the meeting were undisclosed.
Earlier this month, a Miami judge authorised a “John Doe” summons, ordering UBS to provide details of its US clients.
The US Articles of Confederation were modelled on the former Swiss alliance of 13 sovereign states, and the Swiss were inspired by the American Constitution when they formed the world’s second federal state in 1848.
Switzerland currently represents American interests in Iran and Cuba.
Since 2005 a number of agreements have been signed, including on combating terrorism and creating a trade and investment forum. The countries maintain contact at parliamentary level.
An estimated 1 million Americans today have Swiss roots. Around 460,000 Swiss emigrated to the US between 1700 and 2003 and more than 70,000 Swiss citizens live in the US.
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