Key Benefits:
Translation 1
(State on 17 June 2010)
The Swiss Confederation and the United States of America
Hereinafter referred to as "Parties",
Wishing to reaffirm and strengthen the traditional ties of friendship between their peoples and to continue and enrich the relationship of cooperation between the two countries,
Respectful of their sovereignty and their respective democratic traditions, and the rule of law,
Concerned with resolving their disputes amicably in accordance with their respective laws,
Based on s. 26 of the Convention of 2 October 1996 between the Swiss Confederation and the United States of America for the avoidance of double taxation in respect of taxes on income 3 (hereinafter 'the Convention'), on the Memorandum of Understanding as an integral part of the Convention (hereinafter 'the Protocol'), and on the mutual agreement of 23 January 2003 on the application of Art. 26 of the Convention, which constitute a common mechanism for the exchange of information necessary for the prevention of "fraud and similar offences",
As of July 21, 2008, the Internal Revenue Service (IRS), acting under the jurisdiction conferred on it by s. 26 U.S.C. § 7602 (a), has filed a complaint ("John Doe Summons"; JDS) against UBS SA, in order to obtain information on the accounts of some of its customers,
As at the date of signature of this Agreement or at a close date, the IRS and UBS SA have entered into a separate agreement, and
Wishing to avoid any new dispute relating to a request for information, 4
Have agreed upon the following provisions in reference to Art. 26 of the Convention: 5
1. The Swiss Confederation shall deal with the United States request for mutual administrative assistance concerning American clients of UBS SA (hereinafter referred to as "request for mutual administrative assistance") in accordance with the criteria set out in the Annex to this Agreement. On the basis of these criteria, the Parties consider that the request for mutual administrative assistance covers approximately 4450 accounts opened or closed. 1 2
2. The Swiss Confederation establishes a special operational unit to enable the Federal Contributions Administration (AFC), as part of the request for mutual administrative assistance, to make its final decisions within the meaning of Art. 20 J The order of 15 June 1998 concerning the American-Swiss Double Taxation Convention of 2 October 1996 3 Under an accelerated procedure. The deadlines are as follows:
3. Upon receipt of the request for administrative assistance, the AFC shall inform UBS SA accordingly. It shall give priority to the procedure provided for in this Article on the basis of the criteria laid down in the Annex. It undertakes to address any issues that may arise in this regard in accordance with the mechanism set out in Art. 5 of this Agreement.
4. In order to expedite the processing of the request for administrative assistance by the AFC, the IRS will ask all clients of UBS AG to join the voluntary disclosure program as of the date of signature of this Agreement to declare that they Allow UBS SA to provide information on their accounts.
5. The Swiss Confederation is prepared to deal with requests for additional administrative assistance from the IRS relating to the UBS SA case, pursuant to Art. 26 of the Convention, if, in a future judgment, the Federal Administrative Court extends the criteria set out in the Annex.
1 UBS will inform the holders of the accounts concerned by the request for information. (i) These accounts shall be the subject of a final decision of the AFC in accordance with the procedure set out in the Convention, or (ii) the corresponding bank documents will be sent directly to the IRS if the holders of these accounts have declared that they Authorize UBS or the AFC, or (iii) these accounts will no longer be subject to the procedure set out in the Convention if their holders have authorized the AFC to require copies of FBAR declarations to the IRS for the years concerned, as described in the Annex To s. 2.A.b. and 2.B.b.
2 New content according to Art. 1 ch. 3 of prot. On 31 March 2010, applied provisionally from 31 March 2010 and in force since 17 June 2010 ( RO 2010 1459 2909).
3 RS 672.933.61
The Parties undertake to sign as soon as possible, but by 30 September 2009 at the latest, the new Protocol initialled on 18 June 2009 amending, among other provisions, Art. 26 of the Convention. They shall ensure that the new Protocol is ratified as soon as possible through their respective constitutional procedures.
Immediately after the signing of this Agreement, the United States and UBS AG shall submit a joint request to the U.S. District Court of Southern Florida for the filing of the JDS application.
2. Subject to s. 5, the United States shall not request the execution of the JDS as long as this Agreement is in force.
3. Subject to compliance with the provisions of s. 4 by UBS SA, the United States will withdraw the JDS without conditions no later than 31 December 2009 for accounts which are not affected by the request for mutual administrative assistance.
4. The United States will withdraw the JDS without conditions 1 Er January 2010 or at a later date for the accounts concerned by the request for administrative assistance when they have received all relevant information, regardless of source, provided on 18 February 2009 or at a later date, Concerning 10 000 unreported, open or closed accounts of UBS AG. 1 The United States will regularly inform the AFC about the number of cases in which the information has been provided.
5. Subject to compliance with the provisions of s. 4 by UBS SA and subject to s. 5, the United States shall withdraw the JDS without conditions no later than 370 days after the signature of this Agreement for the accounts concerned by the request for mutual administrative assistance.
1 In this paragraph, the expression "whatever source" covers the information provided (i) as part of the request for information, (ii) in the context of the IRS Voluntary Disclosure Program, (iii) as a result of the authorizations Provided to UBS or the AFC for the transmission of information to the IRS, or (iv) under the Deferred Prosecution Agreement between UBS AG and the United States on February 18, 2009. In addition, the IRS will include, to the extent possible, the Information on relevant accounts obtained through FBAR declarations completed after The signing of this Agreement and for which it may have determined that they were attributable to the Parties having concluded this Agreement.
1. In the separate agreement with the IRS, UBS SA undertook to comply with the AFC's request for the transmission of information as part of the request for mutual administrative assistance, within the following time limits:
2. In the separate agreement with the IRS, UBS AG is committed to continuing to support the voluntary disclosure program.
3. The Federal Office of Justice (OFJ), with the support of the Federal Supervisory Authority for Financial Markets (FINMA), ensures the strict compliance of UBS AG with its commitments.
1. The AFC, the OFJ and the IRS meet once a quarter with UBS AG for the purpose of verifying the progress of the procedure established under this Agreement, by evaluating the effectiveness of the voluntary disclosure program set up for the And in deciding on other measures that the Parties may reasonably adopt to support the legitimate interests of the IRS in the application of United States tax law.
2. The Parties may at any time request further consultations on the implementation, interpretation, application and amendment of this Agreement. Such consultations (conducted either orally or in writing) shall take place within 30 days of receipt of such request, unless the Parties decide otherwise.
(3) If one of the Parties fails to fulfil its obligations under this Agreement, the other Party may request immediate consultations with a view to adopting appropriate measures to ensure its implementation.
4. If, 370 days after the signing of this Agreement, the actual and anticipated results differ substantially from what can reasonably be expected on that date in the light of the purpose of the present Agreement and if the Parties cannot remedy it by common Agreement (1) by adopting consultation measures within the meaning of s. 2 and 3 of this Article or (2) by amending the Agreement in accordance with the procedure laid down in Art. 9, each of them may take proportionate measures to restore the right balance between the rights and obligations under this Agreement. These measures, however, must not go beyond what is necessary to safeguard the legal situation that prevailed for each Party just before they were adopted.
5. The measures adopted under this Article shall not impose any financial obligations or new extra-financial obligations at UBS SA.
The first public statements will take place simultaneously on 19 August 2009 at 3.30 p.m. In order to avoid impeding the tax administration in both the United States and Switzerland, the Parties agree not to disclose the provisions of the Annex to this Agreement and to publish it only 90 days after the date of signature. 1 However, there is nothing to prevent the AFC from explaining to the holders of the accounts the specific criteria on which its final decisions will be based. The said holders of accounts shall be liable to a penalty under Swiss criminal law if they disclose these criteria to third parties before the date of publication of the Annex.
1 The annex will be brought to the attention of UBS AG, which will have to comply with the same confidentiality requirements.
This Agreement does not confer any rights or benefits to third parties other than those granted to UBS AG.
In the event of a conflict of standards and for the processing of the request for mutual administrative assistance, the Agreement and its annex shall prevail over the Convention, its Protocol and the mutual agreement of 23 January 2003.
1 Introduced by Art. 1 ch. 4 of prot. On 31 March 2010, applied provisionally from 31 March 2010 and in force since 17 June 2010 ( RO 2010 1459 2909).
This Agreement shall enter into force upon signature.
This Agreement may be amended by written agreement between the Parties. If the Swiss law provides for an additional approval procedure, the Parties may decide to apply the amended text provisionally until its approval.
1 New content according to Art. 1 ch. 5 prot. On 31 March 2010, applied provisionally from 31 March 2010 and in force since 17 June 2010 ( RO 2010 1459 2909). According to Art. 3 ch. 1 of the said Protocol, the amendment of the Agreement does not alter the validity of the request for mutual administrative assistance, the final decisions already issued and all the legal and de facto measures taken by UBS and the AFC under the Agreement.
This Agreement shall remain in force until the Parties have confirmed in writing that they have fulfilled their obligations under this Agreement.
In witness whereof, The undersigned, duly authorized to that effect by their respective Governments, have signed this Agreement.
Done in duplicate at Washington DC on August 19, 2009 in English.
Swiss Confederation and the United States of America
Do, at the time of signing of the Agreement concerning the request for information from the IRS relating to UBS SA, on August 19, 2009 in Washington DC, the following declarations, which form an integral part of the Agreement:
The Swiss Confederation declares that it will be available to the IRS for consideration and processing of requests for additional administrative assistance under Art. 26 of the Double Taxation Convention if these applications are based on a set of circumstances and facts equivalent to those of the UBS SA case.
The United States declares that it will take account of all the circumstances and will take into account the observation by UBS SA of the provisions of the Agreement, as well as its willingness to cooperate, to determine whether the rebalancing measures Within the meaning of s. 5, para. 4, are proportionate.
Done in two copies in Washington on August 19, 2009 in English.
1 Update according to Art. 1 ch. 6-8 prot. On 31 March 2010, applied provisionally from 31 March 2010 and in force since 17 June 2010 ( RO 2010 1459 2909).
2 Such "false constructions" may exist where, according to the information provided by the bank documents, the economic beneficiaries have used (i) false documents; (ii) a modus operandi described in the case studies found to be The Annex to the Mutual Agreement on the Application of Art. 26 of the Convention (p. Ex. Using legal or natural persons acting as intermediaries or beneficiaries to repatriate funds or otherwise transfer them to the offshore company's account); or (iii) telephone cards for Conceal the origin of the trade. These examples are not exhaustive and, depending on the facts and circumstances of the case, other activities may be considered to be a false construction by the AFC.
3 For deposit accounts, there is, according to the interpretation of the Parties, serious reasons to believe that this is a criminal conduct if the American citizen in question does not prove, as a result of the notification of the AFC, that he has Complied with its obligations to report under the tax law relating to interest in such accounts (by allowing the AFC to apply to the IRS for copies of FBAR statements for the period under review).
4 Such "false constructions" may exist where, according to the information provided by the banking documents, the economic rights holders have directed and controlled in a sustainable manner, fully or in part, the management and placement of the Assets of the offshore company's account or otherwise did not respect the forms or content of what was supposed to be the property of the company (which means that the offshore company operated as an intermediary, a screen company or Representative of the United States economic law): (i) by making decisions Investment contrary to the account documentation or tax forms submitted to the IRS and the bank; (ii) using telephone cards or special mobile phones to conceal the origin Trade; (iii) using debit or credit cards for the purpose of repatriating funds fraudulently or transferring them in another way to pay personal fees or routine payment of personal card bills Credit from assets of the offshore company's account; (iv) by making transfers Electronic or other payments from the account of the offshore company to accounts held or controlled by the American economic right or one of its relatives in the United States or another country, for the purpose of concealing the origin Real of the person making these electronic payments; (v) using legal or natural persons acting as intermediaries or beneficiaries to repatriate funds or otherwise transfer funds to the Offshore company; or (vi) by granting loans to U.S. economic law or one of its Assets derived directly from the offshore company's account, guaranteed by that account or paid from that account. These examples are not exhaustive and, depending on the facts and circumstances of the case, other activities may be considered to be a false construction by the AFC.
