U.S., Swiss continue meeting on UBS secrecy agreement
Aug 7, 2009
BY MARTHA BRANNIGAN
The U.S. and Swiss governments are still working Friday morning to settle a high-profile clash over Swiss bank secrecy and the Internal Revenue Service’s right to pursue tax cheats at Zurich-based UBS. Stuart Gibson, an attorney with the Justice Department’s tax division in Washington, D.C., asked U.S. District Judge Alan Gold in an 8:45 a.m. telephone conference call to adjourn to late Friday morning. The judge reset the hearing for 11:30 a.m.
“The parties are still talking,” Gibson told the judge, who has been standing by ready to hear the case in the event the bilateral efforts to settle the matter fail.
The U.S. and Swiss governments unveiled a tentative pact July 31 as Secretary of State Hillary Clinton met in Washington with Swiss Foreign Minister Micheline Calmy-Rey. Both women said they were pleased their nations could settle the contentious issue.
The IRS has been seeking to enforce a so-called “John Doe summons,” demanding the names of 52,000 UBS customers with $14.8 billion in secret offshore accounts. The IRS based the demand on evidence that those customers likely broke U.S. tax law.
Both UBS, which is the largest bank in Switzerland, and the Swiss government maintained that turning over the names would violate Swiss law. The Justice Department said in July it would insist that any settlement provide information on a significant number of customers of UBS, which has admitted to soliciting wealthy Americans to hide money offshore.
UBS, which gained a major U.S. presence with its acquisition in 2000 of PaineWebber, has already provided the names of about 250 to 300 clients with secret Swiss accounts as part of an agreement aimed at avoiding criminal prosecution for the bank’s role in helping U.S. taxpayers dodge taxes. The Swiss government had approved the release of those names because it determined those clients appeared to have committed tax fraud under Swiss standards. UBS also paid a $780 million fine as part of that deferred prosecution agreement. The current dispute pertains to whether UBS should have to hand over the additional names of clients who weren’t part of that agreement.
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