UBS warns parliament about US tax treaty

Swiss bank UBS has warned that Switzerland’s financial industry is at risk unless there is approval of a tax treaty with the United States.

In a letter to parliamentarians, the embattled bank said the other Swiss banks might be next to face pressure from US regulators.

It said the US Internal Revenue Service had collected information on the cross-border activities of about 20 Swiss banks and may soon put pressure on them to reveal details of American tax evaders.

UBS urged parliament to give its approval to the treaty signed by the US treasury department and the Swiss government in August on improving cooperation in tax evasion issues.

UBS admitted last year to helping US citizens evade taxes, following the revelations of a former employer-turned whistleblower, and was fined $780 million. The treaty was a diplomatic solution to the continuing investigation that threatened to drag UBS into a damaging court case and harm its business in the US.

But Switzerland’s Federal Administrative Court ruled in January that authorities were prohibited from handing over information on a majority of some 4,500 accounts sought by the US – data the Swiss said in August last year they would pass on.

UBS also warned that Switzerland risked ending up on a blacklist of uncooperative tax havens if parliamentarians did not approve the accord.

swissinfo.ch and agencies