New York: After months of legal battle over
tax evasion and bank secrecy, the US and Switzerland
governments have reached an out-of-court settlement in the
litigation related to disclosure of information about
American clients of UBS.
The litigation filed by the US Department of Justice
against Swiss banking major UBS demanding information of about
52,000 American clients, could well become a turning point in
the famed Swiss banking secrecy practice.
"The US civil proceedings against UBS are to be settled
out of court after Switzerland and the USA reached an
Agreement in Principle on Friday," Swiss Federal Department of
Foreign Affairs (FDFA) said in a statement on Friday.
With the parties agreeing to an out-of-court settlement,
a Miami court, where the case is progressing, has asked for an
update on the same next week.
Interestingly, the latest development comes just weeks
after Switzerland made it clear that the country's law does
not allow UBS to disclose information.
The US government had filed a suit against UBS demanding
the banking major part with details of about 52,000 American
clients related to possible tax evasion.
According to the statement, Switzerland, represented by
the Federal Department of Justice and Police (FDJP), FDFA and
the Federal Department of Finance (FDF) along with the US
would now negotiate the details of the settlement.
"No further information can be released at the present
time as confidentiality has been agreed for the full duration
of the negotiation process," it noted.
The legal battle on tax evasion has generated much
interest internationally, especially in the backdrop of G-20
nations in April this year, pledging to crackdown on tax
havens.
Earlier in July, the Miami court stayed the proceedings
in the case.
"The stay was requested in order to provide the parties
additional time to discuss a possible alternative resolution
of the matter," the US Department of Justice said in a
statement on July 12.
Last month, the Switzerland said that law of the land
does not permit UBS to reveal information about account
holders.
"Switzerland makes it perfectly clear that Swiss law
prohibits UBS from complying with a possible order by the
court in Miami to hand over the client information," FDJP had
said in a statement.
In February, UBS had paid USD 780 million to the US
government to settle criminal charges related allegations of
the bank helping Americans in tax evasion.
Bureau Report
First Published: Sunday, August 02, 2009, 16:12