Switzerland, under pressure to join a global crackdown on tax fraud, asked the US on Saturday to drop a legal case involving UBS bank in return for a new tax accord the two countries are about to negotiate.
UBS agreed recently to pay a US$780 million fine and disclose the identity of about 300 of its US clients to avert criminal charges, but US authorities are still pursuing it, seeking to access the data of another 52,000 Americans they say are hiding about US$14.8 billion in assets in Swiss bank accounts.
Swiss President Hans-Rudolf Merz, whose country is famous for strict bank secrecy, told a news conference that US Treasury Secretary Timothy Geithner seemed sympathetic to his call, put to Geithner at a meeting in Washington.
Bern and Washington start talks tomorrow on a new bilateral tax treaty and Merz said he hoped the negotiations would move swiftly.
Any such accord would need to be adopted by lawmakers in both countries, though, and perhaps put to referendum in Switzerland, where it could stumble if the US tax evasion case was still hanging over UBS, Merz said.
“I think Mr Geithner is conscious of the fact that these criminal procedures that are taking place in the United States could be an obstacle to the political process of the double taxation accords,” Merz said. “This is why I proposed that the criminal proceedings be withdrawn at the time of signing of such an accord.”
The US authorities arrested and charged an accountant in Florida on April 2 in the first of what they said could be a series of tax evasion prosecutions of American clients of UBS.
Merz said that this move, which came just as Switzerland had said it was ready to negotiate a new tax accord with Washington, had been “harmful to Switzerland and UBS.”
Merz said that on the sidelines of the IMF’s semi-annual meetings, Geithner promised to consider the Swiss request but could not reply immediately.
The US Treasury Department did not respond to a request for comment.
Under international pressure, Switzerland announced earlier this month that it would move toward internationally accepted standards of bank information disclosure in tax fraud cases.
Merz, who is also his country’s finance minister, said that renegotiation of tax accords with the US, Japan and Poland were already earmarked as priorities. Similar moves could also start with European countries.
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