U.S., Switzerland Resolve Bank Secrecy Dispute
Wednesday, August 12, 2009; 4:45 PM
U.S. and Swiss negotiators have initialed a settlement that averts a legal showdown over the U.S. government's landmark challenge to Swiss bank secrecy, a government lawyer said Wednesday.
The U.S. government had sought a federal court ruling compelling Switzerland's largest bank, UBS, to turn over the names of Americans suspected of dodging taxes through the use of 52,000 secret accounts.
In a conference call Wednesday morning with the federal judge presiding over the case, Justice Department lawyer Stuart D. Gibson said the parties had initialed agreements and that they would ask the judge to dismiss the matter when the final documents are signed.
Terms of the deal were not immediately disclosed, leaving unclear what each side gained or conceded.
The agreement "protects the United States government's interests," Internal Revenue Service Commissioner Doug Shulman said in a statement.
"We will release more details when the Swiss government signs the agreement as early as next week," Shulman added.
The head of the Swiss Federal Department of Justice and Police, Eveline Widmer-Schlumpf, issued a statement saying the compromise "is in the interests of both states." UBS Chairman Kaspar Villiger thanked the Swiss negotiators "for their outstanding efforts" and said the bank was grateful for the agreement.
The announcement followed a long-running legal battle that had already undermined Switzerland's legendary bank secrecy, exposed what the United States alleged was a conspiracy at the heart of Swiss banking giant UBS, and threatened to damage relations between two otherwise friendly countries.
Switzerland had bitterly contested the U.S. demand. The Swiss government had said it would prevent UBS from complying, even if a U.S. court ordered it to turn over the information.
Switzerland has been trying to protect the system of secrecy that has helped make its banking industry one of the richest in the world and a major source of Swiss wealth.
The bank had maintained that the information the U.S. was seeking was "protected from disclosure by Swiss financial privacy laws," and a UBS executive told Congress in March that the bank could make no further disclosure without exposing its employees to prosecution in Switzerland.