UBS US tax secrecy deal in balance as referendum urged (Swiss lower house wants citizens to decide)

ZURICH, June 16 (Reuters) - A Swiss-U.S. tax deal crucial to the future of UBS (UBSN.VX) (UBS.N) hung in the balance as the lower house of parliament voted again on Wednesday for a referendum, delaying a final decision until Thursday.

A special panel will be formed to iron out differences between the houses early on Thursday before they take final votes later in the day. Both houses have to reach agreement or leave the deal in tatters.

Parliament's main body finally backed the tax treaty on Tuesday but demands for a referendum on the issue sent it back to the upper house which, early on Wednesday, remained unmoved in its opposition to a popular vote

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http://online.wsj.com/article/BT-CO-20100616-708005.html?mod=WSJ_World_MIDDLEHeadlinesEurope

Swiss Lower House Backs Referendum For UBS Settlement

By Katharina Bart Of DOW JONES NEWSWIRES

EXCERPT :

ZURICH (Dow Jones)—Switzerland’s lower house of parliament Wednesday stuck with its demand that a landmark U.S.-Swiss settlement to disclose 4,450 sets of confidential data on UBS AG (UBS) clients be subjected to a popular referendum, leaving lawmakers until Friday to iron out their differences in committee to prevent the pact from derailing.

The lower house’s latest vote follows the upper house’s refusal earlier Wednesday to attach an optional referendum to the settlement, originally struck in August 2009 between the Swiss government and U.S. officials as part of a crackdown on tax evasion through hidden offshore accounts.

The discrepancy between the two houses—both back the settlement itself, but disagree on allowing Swiss voters to have their say on it, should they so desire—means the issue goes into a smaller delegation of representatives from both houses Thursday to attempt to reach a compromise.

The Swiss government, which doesn’t want the settlement put to Swiss voters, wants a parliamentary vote before the current session ends Friday. Subjecting the agreement, which was elevated in March to a treaty between two states, to an optional referendum is likely to mean a failure by Switzerland to meet the deadline set out in the original pact because of the months it takes to hold a signature drive to launch a referendum in Switzerland.

That in turn is likely to spark a reprisal from U.S. officials, who have said they expect Switzerland to honor the agreement within the timeline set out between the governments.

Increasingly the only really “secret” banking country left is Hong Kong. And it’ll probably stay that way for at least the next few decades; only China has the will to exercise self-interest and keep its foreign investors happy, and only China has the reserves and debt-ownership over the US to make the US listen. And Hong Kong has so much financial clout that it will not get jerked around by anyone - including China (China knows that HK is it’s golden goose and has shown over the last 14 years it’s more than happy to keep the status quo).

Switzerland, Panama, Lichtenstein all have started sharing US citizen banking information with the US. Hong Kong, so far, has been the only place to stand up and say “NO”.

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