In a startling revelation, a Swiss newspaper has claimed the Swiss authorities have already transferred the account details of around 500 UBS AG (UBS) clients to the United States following an agreement over a tax dispute.
  
These accounts are among the 4,450 American clients of UBS AG who have allegedly evaded taxes and for whom Switzerland had consented to provide administrative assistance for data transfer in an agreement in August 2009.
  
The newspaper also reported that while approximately 2,900 files were in fact ready to be handed over, around 1,550 more accounts were in the processing stage. Of the 2,900 cases, client records for around 500 cases have already been surrendered to the United States. However, all 500 clients had consented for the transfer of their account details.
 
However, last week, Switzerland’s lower house voted against this deal to transfer client details. The lower house of the Swiss Parliament rejected the bill by a vote of 104 to 76, with 16 abstentions.
  
The bill, which has been a subject of controversy for months, got linked in a separate case associated with bankers’ bonuses. The Left-inclined parliamentarians who are planning an amendment for implementing a special tax on bankers’ bonuses opposed the bill. They would approve only if the special tax on bankers’ bonuses are included. However, the conservative parties objected such an amendment.
 
The failure to reach an agreement before the adjournment of the Swiss parliament, which is scheduled later this month, will complicate the dispute further. The U.S. Internal Revenue Service plans to pursue all legal options including the reviving of the case against UBS, if the Swiss government fails to provide information by the August deadline.
  
Swiss banks have enjoyed large foreign deposit inflows over the years as a result of the country’s tax system, which emphasizes extreme secrecy. However, following the concern over the dilution of its secrecy, UBS AG is experiencing large fund outflows as worried clients eye a safer refuge.
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