Swiss bank secrecy deteriorate – Grant go ahead for UBS agreement

After a tough political battle, fraught with tension and speculation, Switzerland’s National Council and Senate have finally united in their decision not to subject the UBS agreement to a national referendum.

The landmark victory comes as the National Council, the country’s lower house of parliament, yielded at the eleventh hour, and followed the advice of the conciliation group (comprising 13 members of each council) set up to resolve the highly critical issue. Marking a significant u-turn, the lower house voted by 81 votes to 63, with 47 abstentions, against a referendum.

An agreement was eventually reached thanks to the decision by the Swiss People’s Party (SVP) to reverse its previous stance and to approve the treaty in order to prevent its collapse. Failure by the National Council to comply with the conciliation group’s recommendations would have resulted in an end to the agreement.

Commenting on parliament’s decision, UBS stated that:
“UBS welcomes today’s Swiss Parliamentary approval of the US-Swiss Government Agreement. This vote is an important step to support the resolution at the governmental level.”

“UBS continues to focus on its comprehensive and timely compliance with all obligations under its separate settlement agreements with the US Department of Justice and the Securities and Exchange Commission (known as the Deferred Prosecution Agreement, or DPA, and Consent Order) and is confident that this will be achieved by the relevant deadlines in August 2010.”

As a result of parliament’s decision to give the green light to the agreement, the Swiss Federal Council will now be able to assist US authorities under the terms of the agreement by August 19.

Concluded in August last year, the agreement provides that UBS is to disclose to US authorities the names and bank details of 4,450 of its American clients, suspected of evading taxes over a number of years with the help of the Swiss banking giant. In return, civil charges against the bank will be dropped.