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Business

US reaches out of court settlement with UBS on tax dispute

Video by Yuka ROYER

Text by NEWS WIRES

Latest update : 2009-08-13

The US government and Swiss banking giant UBS have "initialled" a deal to settle a diplomatically sensitive tax secrecy case out of court, said lawyers in the case.

AFP - The US government and Swiss banking giant UBS have reached an out-of-court settlement to close a diplomatically sensitive tax secrecy case, attorneys in the case said Wednesday.

US Justice Department lawyer Stuart Gibson told a conference call with the judge overseeing the case and lawyers for the UBS and the Swiss government that an agreement had been reached, without disclosing further details.

"The parties have initialed agreements," Gibson said. "It will take a little time for the agreements to be signed in final form."

He said the parties involved had asked the court to cancel a trial hearing set for August 17 and that "when the documents are filed, the parties will submit a petition for dismissal" of the case.

UBS lawyer Eugene Stearns thanked Judge Alan Gold for his handling of the case and said it would "allow a very difficult matter to be brought to a successful conclusion."

The case stems from a US government lawsuit filed earlier this year seeking to force the Swiss bank to identify Americans holding offshore bank accounts to evade taxes.

The case could affect as many as 52,000 Americans who hold UBS accounts and could be prosecuted for tax evasion.

UBS had argued that it cannot comply with the US demand without violating Swiss banking secrecy law, which would make it liable for prosecution in Switzerland.

The Swiss government interrupted its summer vacation Monday to hold a special meeting over the case.

The seven members of the Swiss Federal Council or cabinet were meant to return from vacation only on August 19.

An agreement in principle had been announced on July 31, but reaching a final deal took more time than expected.

US authorities had been asking the court to order UBS to reveal the names of American offshore account holders, saying the Swiss bank "systematically and deliberately" violated American laws in promoting offshore accounts

 

Date created : 2009-08-12

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