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Switzerland will ask parliament to turn a deal with Washington that got bank UBS off the hook in a tax evasion case into binding law, plugging a legal hole that is stopping Berne from honoring the agreement.
To settle a bitter dispute,
UBS and the Swiss government agreed in August to disclose 4,450 secret accounts that U.S. citizens used to hide money from tax authorities.
But the settlement hit a stumbling block after a Swiss court ruled in January that such a transfer of data would breach existing Swiss law.
The tax row and uncertainty surrounding the settlement has led to billions of Swiss francs of client withdrawals at UBS.
By asking its parliament to approve the deal,
Switzerland would do away with a legal distinction between tax fraud and tax evasion in providing assistance to the U.S. and be allowed to speedily deliver the data Washington is seeking.
"We will in this way uphold the international commitments made by Switzerland with a view of finding a definitive resolution to the legal and sovereignty conflict with the United States," the Swiss government said in a statement.
The future of UBS, still Switzerland's largest bank by assets, is crucial for the stability of the Swiss financial market, whose tradition of bank secrecy is under attack in the United States and in Europe."
