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Switzerland Postpones UBS Inquiry

Monday, March 8, 2010

Switzerland’s Council of States has elected to postpone the setting up of a special commission to investigate the UBS case, sparking outrage from the country’s lower chamber of parliament.

Due to resolve outstanding issues currently clouding the UBS case, the creation of a parliamentary inquiry commission (une Commission d’enquête parlementaire – CEP) is permitted under the terms of the Parliament Act, which provides that in the case of events with far-reaching consequences, a special group may be established in order to provide vital clarification.

Switzerland’s upper house of parliament has, however, voted to delay its decision regarding the CEP until June 2. In defence of its highly controversial decision, the upper house argued that a delay was necessary in order to await findings from investigations that have been ongoing since March 2009. A final report is due to be published on May 31.

Pressure to establish a CEP has continued to mount following the Federal Administrative Court’s ruling that the order issued by the Financial Market Supervisory Authority (FINMA) to disclose UBS client information to US authorities was unlawful. The Court also criticized the Federal Council’s decision to sign an agreement with the US without taking into consideration the existing double tax agreement between the two countries, which clearly distinguishes between tax evasion and tax fraud.