PRESS RELEASE: UBS : UBS AG: Formal signing of settlement
agreement relating to the John Doe summons
UBS AG (SWX:UBSN) announced today the formal signing of a settlement agreement
with the US Internal Revenue Service (IRS) regarding the John Doe summons issued
on 21 July 2008. The summons has been the subject of a civil action in the
United States District Court of the Southern District of Florida. The principal
terms of this settlement agreement and the related agreement entered into at the
same time by the governments of Switzerland and the United States are described
below:
The agreement does not call for any payment by UBS. Moreover, it resolves all
issues relating to the alleged breaches of UBS's Qualified Intermediary
Agreement with the IRS as set forth in the Notice of Default dated 15 May 2008.
As part of the settlement, the parties will promptly file a stipulation with
the court to dismiss the enforcement action relating to the John Doe summons.
In accordance with the separate agreement between the United States and
Switzerland, the IRS will submit a request for administrative assistance
pursuant to the existing US-Switzerland Double Taxation Treaty to the Swiss
Federal Tax Administration (SFTA). This request will seek information relating
to certain accounts of US persons maintained at UBS in Switzerland. It is
expected that approximately 4,450 accounts will be provided to the SFTA in
response to this treaty request. The SFTA will decide which of those accounts
should be disclosed to the IRS, and such decisions will be subject to judicial
review.
UBS is required to provide information on the accounts covered by the treaty
request to the SFTA and to send notices to affected US persons encouraging them
to take advantage of the IRS's voluntary disclosure practice and to instruct UBS
to send their account information and documentation to the IRS. The US
government will withdraw the John Doe summons with prejudice as to all accounts
not covered by the treaty request no later than 31 December 2009, provided that
UBS has complied with those obligations that are required to be performed by
that date.
The US government will withdraw the John Doe summons with prejudice as to the
remaining accounts - those subject to the treaty request - no later than 24
August 2010 upon the actual or anticipated delivery to the IRS of information
relating to accounts covered by the treaty request that does not differ
significantly from the expected results. In addition, the summons will be
withdrawn with prejudice as to those remaining accounts if at any time on or
after 1 January 2010 the IRS has received information relating to at least 10,
000 accounts of US persons maintained at UBS in Switzerland. The sources of such
information include, in addition to the treaty request itself, the IRS's
voluntary disclosure practice, client instructions to UBS to send account
information to the IRS and the Deferred Prosecution Agreement.
If neither of these events were to occur by 24 August 2010, the two
governments would confer and consult in order to consider alternative mechanisms
for achieving the expected levels of account information exchange expected to
occur through the treaty request. Possible measures will not impose any
financial or new, non-financial obligations on UBS. If these efforts were not
successful, the John Doe summons could remain in place beyond 24 August 2010 as
to the portion of the accounts covered by the treaty request that have not
otherwise been disclosed to the IRS.
UBS Chairman Kaspar Villiger said: "This agreement helps resolve one of UBS's
most pressing issues. I am confident that the agreement will allow the bank to
continue moving forward to rebuild its reputation through solid performance and
client service. UBS welcomes the fact that the information-exchange objectives
of the settlement can be achieved in a lawful manner under the existing treaty
framework between Switzerland and the United States."
Cautionary Statement Regarding Forward-Looking Statements
This release contains statements that constitute "forward-looking statements",
including but not limited to statements relating to the consequences of the
agreements described above and their anticipated effect on UBS's reputation and
future development. While these forward-looking statements represent UBS's
judgments and expectations concerning the matters described, a number of risks,
uncertainties and other important factors could cause actual developments and
results to differ materially from UBS's expectations. These factors include, but
are not limited to: (1) uncertainties as to the actual provision of information
to the IRS as contemplated by the agreements and the consequences arising from
any possible significant difference from the expected results thereof; (2)
future developments in the markets in which UBS operates or to which it is
exposed; (3) the degree to which UBS is successful in effecting organizational
changes, implementing strategic plans and retaining and attracting employees;
and (4) political, governmental and regulatory developments, including possible
actions or inquiries concerning UBS's cross-border banking business by tax or
regulatory authorities in other jurisdictions. In addition, UBS's actual results
could depend on other factors that we have previously indicated could adversely
affect our business and financial performance which are contained in our past
and future filings and reports, including those filed with the SEC. More
detailed information about those factors is set forth in documents furnished by
UBS and filings made by UBS with the SEC, including UBS's restated Annual Report
on Form 20-F/A for the year ended 31 December 2008. UBS is not under any
obligation to (and expressly disclaims any obligation to) update or alter its
forward-looking statements, whether as a result of new information, future
events, or otherwise.
(END) Dow Jones Newswires
08-19-091004ET
Copyright (c) 2009 Dow Jones & Company, Inc.
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