Swiss senate endorses key US-Swiss settlement for UBS

3rd June 2010, Comments 0 comments

The Swiss senate on Thursday backed government plans to hand over details of UBS clients suspected of tax fraud to the United States, in a first step towards crucial parliamentary endorsement of the deal.

Thirty-one of the members of the States Council voted in favour of the agreement with Washington to hand over banking details of some 4,450 US clients of the Swiss bank. Twelve voted against.

The other chamber, the National Council, is due to debate and vote on the issue on Monday.

The August 2009 deal between the US and Swiss governments is the cornerstone of an out-of-court settlement of a US tax evasion case against UBS that has shaken Switzerland's sacrosanct banking secrecy.

The agreement had been threatened by a Swiss supreme court ruling in January that upheld one of the clients' appeals against the deal, bringing about the need for legislative endorsement.

The issue has sparked a sharp debate in Switzerland.

Apart from fears for banking secrecy, there is also widespread hostility towards UBS and its repeated reliance on state help when it has got into financial and legal trouble that many regard is of its own making.

During the debate Swiss centre-right Radical Party senator Dick Marty likened UBS managers to "gangsters" with a "predatory appetite."

Socialist senator Simonetta Sommaruga said: "We have to get UBS out of a rut, as happened in the past with taxpayers' money."

The Swiss government granted UBS an emergency 60-billion-dollar (47.4-billion-euro) aid package in October 2008 when it suffered huge losses from the US subprime crisis, weeks before the bank was hit by US litgation.

Swiss Justice Minister Eveline Widmer-Schlumpf acknowledged during Thursday's debate that UBS had "systematically helped to violate" US law but insisted that the settlement was the only way to resolve the issue.

© 2010 AFP

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