UPDATE 2-Swiss committee backs UBS deal but referendum looms

* Swiss-U.S. deal key would put an end to UBS tax dispute

* Parliament seen approving deal

* Swiss would miss key U.S. deadline if referendum approved

* Leuthard says U.S. to accept delay caused by referendum

(Adds more background, comment from Swiss president)

By Lisa Jucca

ZURICH, June 2 (BestGrowthStock) – A key Swiss parliamentary
committee recommended on Wednesday parliament back a Swiss-U.S.
deal to end a tax row over bank UBS (UBSN.VX: )(UBS.N: ), 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. [ID:nLDE64B1HV]

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 fulfil 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 organisers 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.”

Stock Market Trading

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

UPDATE 2-Swiss committee backs UBS deal but referendum looms