U.S.-Swiss talks to settle a tax evasion row against UBS have stalled as the two states have yet to agree legal details on how to allow the transfer of some bank client data to Washington, a Swiss paper said on Sunday.
Switzerland and the United States are working toward a settlement that would spare UBS a U.S. trial. But they failed to reach agreement on Friday and asked the judge presiding over the case to continue talks until August 12.
Berne and Washington have already reached an agreement in principle on the major issues and a settlement is expected to involve the disclosure to U.S. tax authorities of the names of some of the 52,000 U.S. clients of UBS holding secret Swiss accounts.
But they have yet to finalize the technical details of how to transfer the data, Swiss newspaper NZZ am Sonntag said.
According to the paper, the United States wants guarantees that the so-called administrative assistance process, the legal framework under which bank client details can be transferred to the United States, will deliver the data certainly and quickly.
But Switzerland is not ready to introduce emergency measures to speed up the process, as this would further weaken its already hard-pressed bank secrecy laws.
Berne wants therefore to stick to the complex, and potentially lengthy, administrative assistance process.
This principle means a big concession for the Internal Revenue Service . Therefore the IRS is now trying to get as much as possible out of the legal details, a source familiar with the Swiss negotiating team was quoted as saying by the NZZ am Sonntag.
Christoph Bandli, president to the Swiss administrative court that has the power to rule over client appeals to UBS data transfer, said the process would last at least three months.
It cannot be done any quicker, he was quoted as saying in the NZZ am Sonntag.
Berne already stretched its legal system in February when it forced UBS to quickly hand over 250 client names and waived a related ongoing process to settle criminal tax charges that the Swiss financial regulator said put the bank's survival at risk.
A trial against UBS is set for August 17. If the parties want to continue to talk, discussions would drag until the end of September. The next available data for a trial is September 21.
(Writing by Lisa Jucca; Editing by Sanjeev Miglani)