Canada continues to pursue UBS AG (UBS) for the details of Canadian clients who have accounts in the Swiss bank. The Canadian government is negotiating with the Swiss Bank since September last year. However, Canada’s Revenue Minister Jean-Pierre Blackburn has warned that, if required, Canada will take UBS to court to extract the details of indigenous clients.
 
Blackburn said on Tuesday that around 96 Canadian clients of UBS have voluntarily disclosed their UBS accounts to Canada’s revenue agency. The government has reached a settlement with 32 of these clients. This has resulted in C$25 million ($24 million) of tax recoveries.
 
In August 2009, UBS agreed to disclose account details of 4,450 American clients, who have allegedly evaded taxes. The U.S. Internal Revenue Service has reported billions in tax recoveries through a similar investigation of the American clients of UBS AG.
 
Blackburn will meet his counterparts from the U.K., Germany, France and the Organization for Economic Co-operation and Development this week to discuss policies to fight tax evasions.
 
Swiss banks such as UBS have enjoyed large foreign deposit inflows over the years as a result of the country’s tax system, which emphasizes extreme secrecy. However, the adoption of the Organization for Economic Co-operation and Development standards for tax cooperation coupled with the US Internal Revenue Service’s lawsuit against UBS has led to a dilution of secrecy. The company is experiencing large fund outflows as worried investors eye a safer refuge.
 
The company’s third quarter results were disappointing and recorded its fourth consecutive quarterly loss. The ongoing global economic turmoil has severely hurt the Swiss banking major’s balance sheet when the subprime crisis led to record losses.
 
The company had to take a financial aid package from the Swiss government. In addition, the issues emanating from the dilution of Swiss banking secrecy will significantly challenge the company’s return to profitability.
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