According to the criteria set out in the annex to the agreement, the US treaty request covers the following persons where there is a reasonable suspicion of "tax fraud or the like":
- US-domiciled clients of UBS who directly held and beneficially owned undisclosed (non-W-9) custody accounts and banking deposit accounts in excess of CHF 1 million at any point in time between 2001 and 2008;
- US persons (irrespective of their domicile) who beneficially owned offshore company accounts established or maintained between 2001 and 2008.
Further investigations are ongoing in both categories to establish whether "tax fraud or the like" has been committed under the terms of the tax treaty. The term "tax fraud or the like" is defined in greater detail in the agreement on the UBS affair. On the one hand, it also extends to fraudulent conduct (e.g. constructing a scheme of lies or submitting incorrect or false documents) that might result in the concealment of assets and the underreporting of income. Where such conduct is proven, the qualifying threshold under the US treaty request is lowered to include holders of accounts containing assets of CHF 250,000 or more. In addition to cases of conventional "fraudulent conduct", Switzerland may also be asked to obtain information on continued and serious tax offenses. According to the annex, this refers to accounts that generated revenues of more than CHF 100,000 on average per year for a period of at least three years, where such revenues were not reported to the IRS.
Efficient Handling – Rights Safeguarded
Under the terms of the agreement, the Swiss Federal Tax Administration (SFTA) must evaluate the 4,450 UBS accounts within 360 days of the treaty request being received (31 August 2009). An efficient system was set up to handle the treaty process. It is based on the electronic processing of the client dossiers filtered by UBS. Subject to the usual security precautions, these dossiers are sent to the SFTA, where audit firm PricewaterhouseCoopers (PWC) reviews the facts in accordance with SFTA instructions. The legal qualification lies with the SFTA. It will allow the individuals concerned to inspect their dossiers upon request, and will also give them the opportunity to state their case. The rights of these individuals are therefore safeguarded in full. Finally, the SFTA will decide whether or not assistance will be provided, and will issue a final decision. Upon receipt of this decision, the individuals concerned have 30 days in which to lodge an appeal with the Federal Administrative Court, which will issue a final decision. The Federal Government estimates the costs of the UBS affair at around 40 million Swiss francs.
Task Force Fully Operational
The SFTA set up a dedicated task force to speed up the treaty request process. Hans-Jörg Müllhaupt, who was appointed by the Federal Council as overall project manager in August 2009, is in charge of proceedings. Following set-up work in September, the task force became fully operational in October 2009. The first 500 client dossiers prepared by UBS were received by the end of that month, i.e. within the agreed 60-day period that began when the treaty request was received by the SFTA.
Around 40 people – ten of them from PWC – are currently employed on the project. Where necessary, additional lawyers may be brought in at short notice from other departments, particularly those of the Federal Office of Justice (FOJ).
Final decisions are being issued on an ongoing basis, meaning that the first can be sent out as early as today. Under the terms of the agreement, the SFTA has 90 days from receipt of the treaty request, i.e. until the end of November 2009, to issue the first 500 decisions. The remaining dossiers must be processed by the SFTA within 360 days of receiving the treaty request.
For the complete documentation see the pages in German, French or Italian
Last modification 17.11.2009