Swiss to avoid Senate hearing on tax havens

BERN, Switzerland -- The Swiss government said Sunday it will not attend a U.S. Senate hearing on tax havens — an apparent protest against a U.S. lawsuit aimed at forcing banking giant UBS AG to hand over data on tens of thousands of American customers.

Switzerland declined an invitation to the March 4 hearing by the Permanent Subcommittee on Investigations, Finance Ministry spokesman Roland Meier said.

The Internal Revenue Service is seeking to force UBS to turn over records for an estimated 52,000 U.S. customers who allegedly violated American tax laws by concealing Swiss accounts worth at least $14.8 billion.

The IRS lawsuit filed in Miami came only hours after UBS agreed Wednesday to pay $780 million and disclose up to 300 UBS account holders suspected of tax fraud, in a deal with the U.S. Justice Department.

"Switzerland notes that despite the agreement, U.S. authorities have launched a civil lawsuit against UBS," Meier said. "Switzerland regrets that the Department of Justice has threatened UBS with unilateral measures, despite cooperation of UBS and Swiss authorities with the U.S. authorities."

The topic of the March 4 hearing is "Tax haven banks and U.S. tax compliance — obtaining the names of U.S. clients with Swiss accounts."

Swiss financial authorities have acknowledged that the disclosure of up to 300 suspected tax frauders occurred under intense pressure from the U.S. Justice Department.

The move prompted anger in Switzerland at UBS' business practices and what many saw as heavy-handed treatment by U.S. authorities. It also sparked a nationwide debate over the country's cherished banking secrecy, which some said they fear might come to an end.

The banking industry has helped transform Switzerland into one of the world's richest countries.