Diplomacy lets off Swiss bank UBS over US customer tax evasion scandal

While Obama's administration looks to clamp down on tax evasion, the Swiss bank must only hand over details of 5,000 of its full list of 52,000 US clients

Switzerland's leading bank, UBS, is likely to avoid paying a fine in a face-saving diplomatic deal with the US government over accusations that it flouted tax laws on a huge scale by allowing Americans to hide their wealth in secret bank accounts.

Under the terms of an agreement being thrashed out with the US department of justice, UBS is set to hand over details of about 5,000 US clients holding larger Swiss bank accounts, rather than its full list of 52,000 US customers with total assets of $14.8bn (£8.8bn) initially demanded by the Internal Revenue Service (IRS).

The proposed settlement would resolve a major diplomatic dilemma for the US, which views Switzerland as a very significant and trusted ally. UBS was accused of aggressively soliciting American clients and aiding and abetting them in dodging tax liabilities – a claim which risked opening a rift between Washington and Bern.

Lawyers announced on Friday that an agreement "in principle" had been reached on the major issues. The two sides hope to iron out finer details by the end of this week but Swiss media reported that Switzerland had won a key battle by protecting its tradition of bank secrecy.

"The Swiss legal system is maintained, because the US have promised to act on the basis of the current agreements and to ask for legal assistance again," Michael Ambuehl, state secretary in Switzerland's foreign ministry, told the NZZ am Sonntag newspaper.

For Obama's administration, this poses a delicate quandary. Swiss diplomats run American interests in Iran, North Korea and Cuba and sources close to key US state officials suggest that "we owe them".

http://www.guardian.co.uk/business/2009/aug/03/ubs-bank-us-tax-evasion

:Nya, nya, nya:

Diplomacy lets off Swiss bank UBS over US customer tax evasion scandal

Diplomacy lets off Swiss bank UBS over US customer tax evasion scandal

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