Canada’s Revenue Minister Jean-Pierre Blackburn said on Wednesday that around 88 Canadian clients of UBS AG (UBS) have voluntarily disclosed their UBS accounts to Canada’s revenue agency. The government has reached settlement with around 41 of these clients who have reported C$15 million ($14.3 million) in previously undisclosed income.
 
Canada has been trying to get details of Canadian clients who have accounts in UBS AG. Swiss banks such as UBS AG 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.
 
If required, Canada will take UBS AG to court to extract details of indigenous clients who have accounts in the bank. In August this year, UBS AG agreed to disclose account details of 4,450 American clients, who have allegedly evaded taxes. Last month, around 14,700 Americans have surrendered themselves under a government amnesty program, according to the U.S. officials, fearing a crackdown on offshore tax evasions.
 
UBS’s third quarter results were disappointing as the company reported its fourth consecutive quarterly loss. The company is experiencing large fund outflows as worried investors are eyeing a safer refuge. The ongoing global economic turmoil has severely hurt the Swiss banking major’s balance sheet when the subprime crisis led to record losses. In particular, the investment banking arm of UBS experienced large trading 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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