Swiss authorities said Wednesday that Bern and Washington have agreed to upgrade an out-of-court settlement for banking giant UBS to overcome a legal hitch that had threatened the deal. The two countries and the Swiss bank agreed in August that it would reveal the identities of some 4,450 American clients in a landmark out-of-court settlement for a US tax-evasion case that challenged Switzerland's sacrosanct banking secrecy.
But a Swiss court ruling earlier this year had called its legal basis in Switzerland into question. The amended accord, which will now be put to the Swiss parliament for approval, is necessary in order to get around current Swiss banking secrecy law which does not allow treaty assistance on tax evasion.
"The amending protocol raises the treaty request agreement of August 19, 2009 to the same level as the bilateral double taxation convention," the Swiss Federal Office of Justice said in a statement. The Swiss federal administrative court in January upheld an appeal by an American client of UBS against the transfer of his banking details to the US authorities due to banking secrecy laws.