Monday, November 29, 1999

UBS may face U.S. suits if parliament kills deal - Swiss minister

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UBS could face lawsuits in the United States if the Swiss parliament fails to agree to a deal passing data on the bank's U.S. clients to U.S. tax authorities, Switzerland's finance minister said.Hans-Rudolf Merz told the newspaper SonntagsBlick he hoped parliament, which will vote on the measure in June, would approve the agreement, though he could not be sure."The justice and finance departments of the U.S. administration signalled to us that they'd again take up the legal cases against UBS, which are now suspended," Merz was quoted as saying."These criminal and civil suits could take a long time."Merz also said it was as yet too early to return to UBS, which was bailed out by the government, a toxic asset fund now held by the central bank.Berne agreed in August to hand over to U.S. tax officials the names of 4,450 tax evaders holding secret accounts with UBS, piercing a hole in the country's bank secrecy laws.But a Swiss administrative court ruling in January blocked the data transfer, forcing the Swiss government to adjust the settlement, which needs parliament's approval to become effective.The ultra-nationalist SVP, the country's largest party, has already said it will vote against the UBS deal. It could kill the deal if joined by the Social Democrats, the country's second-largest political force.Merz and Economy Minister Doris Leuthard have both said there is no backup plan if parliament shoots down the UBS deal, and Switzerland must hand over the data by August.The Social Democrats have said they will agree to it only if the government gives definitive guarantees on new bills for making make bankers' bonuses less tax friendly and other measures.
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