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Home News Swiss parliament passes deal with US on bank UBS

Swiss parliament passes deal with US on bank UBS

Published on 15/06/2010

Switzerland's lower house of parliament Tuesday passed a deal with Washington settling US tax evasion litigation against Swiss banking giant UBS, considered crucial for the bank's future.

The move by the National Council sealed overall parliamentary endorsement of the deal after a previous rejection last week.

However, lawmakers still have to settle whether the agreement between Bern and Washington can be challenged by a referendum, amid a disagreement between the two houses of parliament that could delay the final green light by several months.

Tuesday’s motion in the National Council was approved by 81 votes to 61. Fifty-three Swiss lawmakers abstained.

Switzerland, the United States and UBS agreed in August 2009 that the bank would identify 4,450 US clients suspected of tax evasion, in an attempt to settle lawsuits by US authorities to force the bank to hand over information.

The deal needed parliamentary approval after the Swiss supreme court in January called its legal basis into question.

The Swiss senate had already endorsed the agreement.

The United States reiterated last week that it would revive potentially costly litigation for the troubled Swiss bank if Switzerland reneged on the agreement, which opened a corner of banking secrecy.

The Swiss government has repeatedly warned that a failure to approve it would harm the Swiss financial industry.

The lower house had rejected the document in a first vote last week, while the senate had already endorsed the accord twice.

But a new technical hitch emerged after the National Council decided in a separate vote on Tuesday that the deal should be open to an optional referendum, unlike the senate which had ruled out such a move.

Under Switzerland’s complex legislative system, Swiss citizens may have 100 days to petition for a nationwide referendum challenging some newly passed legislation by collecting 50,000 signatures.

That would delay application of the deal until August 19, the Swiss news agency ATS reported.

The two houses of parliament now have to settle over the coming days whether or not the deal can be challenged under the rule.