Swiss government completes processing of undisclosed UBS accounts
The Swiss government announced, on 26 August 2010, that it had completed processing the 4,450 undisclosed UBS accounts that it was obliged to disclose under the terms of last year's bilateral agreement with the US. The IRS, the US tax authority, confirmed that it had received account information on over 2,000 of those accounts.
The agreement of 19 August 2009 stipulated that Switzerland would establish a special task force that would enable the Swiss Federal Tax Administration (SFTA) to render final decisions on all 4,450 accounts by 26 August. The issuance of a final decision by the SFTA triggers a 30-day period during which an affected individual may appeal the decision to the Swiss Federal Administrative Court. The agreement did not set a time limit for the resolution of the appeals process.
The Swiss government said: "Talks are being held between the contracting parties regarding the final stage of the agreement's implementation. Both parties are optimistic that the US authorities will receive most of the agreed account information within a reasonable period of time and that the US authorities will definitively withdraw the civil action (John Doe Summons) brought against UBS."
It also hoped that the transfer of the UBS client data would be largely concluded by autumn 2010. The IRS similarly stated: "Based on information received to date and assurances by the Swiss Government, we anticipate being in a position to withdraw the John Doe summons this fall."
The bilateral agreement was reached after the IRS and the Department of Justice sought a John Doe summons against UBS in the US District Court for the Southern District of Florida in 2008. In conjunction with the agreement, the US issued a treaty request to Switzerland for information on some UBS accounts held by US clients.
The John Doe summons is still outstanding regarding UBS accounts covered by the US treaty request, but under the agreement, the summons would be withdrawn for those accounts as long as UBS has complied with the requirement to turn over account information to the SFTA.
In January, the Swiss Federal Administrative Court nearly scuppered the deal when it ruled that the criteria used to determine what information would be shared went beyond the disclosures authorised by Swiss law and the existing tax treaty with the US. As a result, the Swiss government was forced to seek approval of the agreement in the parliament. After several failed attempts to win approval without requiring that the agreement be subject to a referendum, the parliament approved the agreement on 17 June.
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