April 23, 2010 - Phil Hodgen

Swiss update for approval of UBS settlement

I’m in Riyadh so I don’t have full access to the world and people and stuff like that.  But a very recent Swiss court case has told us that we are one step closer to having the UBS agreement enforced — if the Swiss Parliament approves it.

Originally the UBS agreement (by which names of U.S. taxpayers would be turned over by the Swiss to the IRS) was invalidated by a Swiss court.  The grounds for this were simple:  the UBS agreement was a modification of a bilateral treaty.  Under Swiss law, treaties must be approved by Parliament, so the modification could not be effective without Parliamentary approval.

After that date, the UBS agreement was cleaned up a bit to make it ready for a vote in Parliament.

The latest Swiss court decision has essentially said “Yes, the newly modified UBS agreement in fact does modify the treaty, and it still needs approval by Parliament, but if Parliament approves it then it is fully valid.”

What this does is makes it harder for future attacks on the validity of the UBS agreement itself.

We’re still waiting for Parliament.  I don’t pretend to know what the Swiss politicians will do.  But here’s a hint.  I was standing in the immigration line at the Riyadh airport.  And standing and standing and standing and standing.  But I digress.  A Swiss gentleman was behind me.  His attitude about the situation and Parliamentary approval was clearly “Meh, it’s a problem for those Americans.”  One attitude does not indicate the end result, but I want to tell you this because you shouldn’t assume that the entire country of Switzerland is up in arms about this.  Quite the contrary.  There is a significant chunk of people who think more transparency is good, and a significant chunk of people in the “Meh, not my problem” category.

Don’t count on the Swiss Parliament to bail you out.

Voluntary Disclosure