Milestone US, Switzerland Agreement to Capture Tax Evasion

The Swiss Parliament approved a milestone agreement on June 17, between Switzerland and the United States.
Milestone US, Switzerland Agreement to Capture Tax Evasion
6/17/2010
Updated:
6/17/2010
The Swiss Parliament approved a milestone agreement on June 17, between Switzerland and the United States to disclose information on approximately 4,450 Swiss bank accounts owned by American clients under investigation for tax fraud.

Swiss banking policy is noted for its secrecy, but failure to comply with a court order to disclose client information in a criminal investigation was not an option. In fact, the directors of the concerned bank, UBS, could face indictment and legal action by American courts.

In 2008 the Swiss investment bank, UBS came under the scrutiny of the U.S. Department of Justice for assisting American citizen with tax evasion.

According to the ruling by the U.S. district court in Florida on Feb. 18, 2009, UBS acknowledged participation in “a scheme to defraud the United States and its agency, the Internal Revenue Service, by actively assisting or otherwise facilitating” Americans in a manner designed to evade tax. UBS was fined US$780 million dollars.

UBS announced in a statement on June 17 that it welcomed the approval of the U.S.-Swiss Government Agreement. Actions for transferring information on UBS clients, is underway.

In the wake of the financial crisis, governments have stepped up efforts to capture tax evaders. On March 26, 2010, Swiss Finance Minister Hans-Rudolf Merz and German Finance Minister Wolfgang Schäuble, met in Bern to discuss bilateral tax issues.