UPDATE 2-Swiss-US deal on UBS delayed by lower house snub

* Swiss risk missing deadline for tax data transfer to U.S.

* Lower house rejection contradicts upper house’s support

* Two houses have until end of next week to find accord

* Referendum could derail agreement if approved

* UBS shares extend loss after vote, down 3.1 percent

(Adds comments by top lawmaker, UBS, parliament spokesman)

By Jason Rhodes and Lisa Jucca

BERNE/ZURICH, June 8 (BestGrowthStock) – Switzerland’s delivery of
UBS (UBSN.VX: ) (UBS.N: ) client data to U.S. tax officials has been
delayed after the Swiss lower house rejected a Swiss-U.S. deal
to solve a tax dispute, triggering a new parliamentary debate.

Tuesday’s last-minute snub by the main arm of parliament
came after a vote in favour of the deal by the upper house last
week, meaning the two houses will have to try and agree a common
text by the end of next week. [ID:nLDE65117T]

Even if the Swiss parliament were to fully support the text
of a deal, there is still the question of whether the agreement
will be put to a referendum, a scenario the lower house
supported on Tuesday.

“(A full rejection of the deal) would lead to uncertainty
for Switzerland as a place to do business. This would be poison
for the economy,” Christophe Darbellay, head of the centrist
Christian Democrat party, told Reuters after the vote.

“We now have to find our way out of this crisis and … a
sensible solution,” Darbellay added.

Washington agreed on Aug. 19 2009 to drop tax evasion
charges against UBS after Berne promised it would transfer by
the end of August this year bank details of 4,450 U.S. clients
of UBS, a move which would be in breach of Swiss bank secrecy
laws. [ID:nLDE64B1HV]

A Swiss court in January duly blocked the data transfer,
forcing Berne to bypass the ruling with a legal patch that
requires parliamentary approval by both houses and risks
delaying the sharing of bank data beyond the August deadline.
For a related timeline, click on [ID:nnLDE6570PP]
For a FACTBOX, click on [ID:LDE6570TS]
For a graph click on


The lower house’s vote against the deal is another headache
for the government, which has struggled to win political support
for a deal many in Switzerland see as a capitulation to the
United States to get UBS, the country’s largest bank, off the

The U.S. authorities could launch a fresh tax case against
UBS if the Swiss fail to deliver the client data in time.

“What do you want to achieve with that (rejection)? Wouldn’t
it be in the interest of our economy … when we could put an
end to this painful story,” Justice Minister Eveline
Widmer-Schlumpf said in a final appeal ahead of the vote.

UBS spokesman Serge Steiner said the world’s second-largest
wealth manager had taken notice of the vote.

Key to the vote against the deal was a decision by the
right-wing SVP party, Switzerland’s largest, to reject it after
an 11th-hour change of heart as it failed to win clear support
for its campaign against new taxes on bankers’ bonuses.

The SVP is also supporting a referendum on the deal that
would delay any accord’s entry into force by up to a year.

“There is no set deadline (for agreeing on a new text), but
the two houses would have to work it out by the end of next week
at the latest,” said parliament spokesman Mark Stucki.

“But if they approve a referendum, Switzerland would not be
able to deliver the data on time.”

The United States has accused UBS of helping rich Americans
hide some $20 billion of untaxed money in secret accounts. The
probe came while the bank was already weakened by $50 billion of
writedowns on toxic assets which put its survival at risk.

Since the Swiss courts cast uncertainty on the deal, U.S.
officials have maintained they expect the Swiss to live up to
their end of the bargain.

The Swiss government has repeatedly said an agreement is the
only way to end the prolonged UBS tax dispute, a distraction for
Chief Executive Oswald Gruebel as he tries to rebuild the
hard-pressed wealth manager.

Shares in UBS were down 3.1 percent at 1009 GMT, extending
earlier losses following parliament’s vote and against a 1.5
percent fall in the STOXX Europe 600 banking index (.SX7P: )

Stock Market Advice

(Additional reporting by Kim Dixon in Washington; Editing by
David Holmes)

UPDATE 2-Swiss-US deal on UBS delayed by lower house snub