The Swiss government said on Wednesday it may have to renegotiate a carefully wrought deal with the US to hand over thousands of files on suspected tax cheats in return for an end to US legal proceedings against Switzerland’s biggest bank, UBS AG.
Bowing to a court decision that declared parts of the deal illegal, officials will now seek a way to salvage the agreement reached with Washington in August without breaking Swiss law, Swiss Justice Minister Eveline Widmer-Schlumpf said.
“The discussions that we will lead may result in formal or material changes to the treaty,” she told a news conference after a Cabinet meeting in Bern.
PHOTO: EPA
The Internal Revenue Service, the US agency that has taken the lead on this issue, said it expects the Swiss government “to continue to honor the terms of the agreement.”
Until the legal impasse has been resolved, Switzerland will stop transferring any more files on UBS customers alleged to have hidden money in offshore accounts with the bank’s help, Widmer-Schlumpf said, adding that only six such files have been transferred to the US, each time with the client’s written consent. A further 1,168 files are close to completion.
UBS said in a statement that it fully supports the government’s decision to seek talks with US authorities.
“As before, we will fulfill all our commitments under the agreement,” it said.
The latest episode in the UBS saga is an embarrassment for Switzerland, which is trying to shed its image as a haven for tax cheats, and a headache for the bank, whose reputation has been tarnished by revelations about its cross-border dealings with rich US clients.
Widmer-Schlumpf said the outcome of the talks, which could require parliament to approve changes to Swiss law, will affect not just the future of UBS but “also the stability of the financial center and the economic situation of Switzerland.”
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