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Swiss committee backs UBS deal but after referendum

City A.M. Reporter
A KEY Swiss parliamentary committee recommended yesterday that parliament back a Swiss-US deal to bring to an end a tax row over bank UBS, increasing the chances the deal will get through.

But the economic affairs and tax committee also recommended that parliament give the green light to a referendum on the deal, something that would block its entry into force for at least three months and push it beyond an end-August deadline, a committee official said.

“The committee backed the deal. But the mere possibility of a referendum would block the entry into force of the deal for at least three months,” the official said.

The parliament will vote later this month on whether to approve a legal amendment allowing Switzerland to disclose to US tax authorities bank details of 4,450 US clients of UBS in spite of Swiss bank secrecy laws, thus fulfilling an obligation to transfer the data by the end of August.

Although the Swiss government agreed in August 2009 to share some secret Swiss accounts details to end a US tax dispute against UBS, a Swiss court ruling in January has blocked the whole process.

Support for the controversial deal in the Swiss parliament would end the legal deadlock and avert the risk of a fresh US tax litigation against UBS.

The chances of the deal going through have been rising since Switzerland’s largest party, the right-wing SVP, said last month it was considering supporting the measure in parliament.

But if parliament also approves a referendum, Switzerland will not be able to fulfil its obligations with Washington on the UBS tax affair as entry into force would be delayed by three months to allow for signature gathering.