A key Swiss parliamentary committee recommended on Wednesday parliament back a Swiss-U.S. deal to end a tax row over bank UBS , increasing the chances the deal will get through.

But the economic affairs and tax committee also recommended that parliament give the green light to a referendum on the deal, something that would block its entry into force for at least three months and push it beyond an end-August deadline, a committee official said.

The committee backed the deal. But the mere possibility of a referendum would block the entry into force of the deal for at least three months, the official said.

The parliament will vote later this month on whether to approve a legal patch allowing Switzerland to disclose to U.S. tax authorities bank details of 4,450 U.S. clients of UBS in spite of Swiss bank secrecy laws, thus fulfilling an obligation to transfer the data by end August.

Although the Swiss government agreed in August 2009 to share some secret Swiss accounts details to end a U.S. tax dispute against UBS, a Swiss court ruling in January has blocked the whole process.

Support for the controversial deal in the Swiss parliament would end the legal deadlock and avert the risk of a fresh U.S. tax litigation against UBS.


The chances of the deal going through have been rising since Switzerland's largest party, the right-wing SVP, said last month it was considering supporting it in parliament.

But if parliament also approves a referendum, Switzerland will not be able to fulfill its obligations with Washington on the UBS tax affair as entry into force would be delayed by three months to allow for signature gathering.

If the organizers of the referendum do succeed in collecting a sufficient number of signatures, then the delay could be up to a year to allow for the national consultation to take place.

The United States will accept a referendum if it must take place, Swiss President Doris Leuthard told a press conference in Geneva. We will explain (the situation) to them.

(Additional reporting by Catherine Bosley in Zurich and Robin Bleeker in Geneva; Editing by Jon Loades-Carter and Louise Heaves)