Will UBS ending offshore banking services scare tax cheats?

Posted Jul 17th 2008 4:36PM by Jonathan Berr
Filed under: Products and Services, Personal Finance

In a surprise move, UBS AG (NYSE: UBS) said today that it would end off-shore banking and security services in the U.S.

The decision was disclosed today by Mark Branson, the chief financial officer for UBS Global Wealth Management and Business Banking during testimony before a U.S. Senate hearing on tax havens. According to Bloomberg News, the U.S. Senate Permanent Subcommittee on investigations found that UBS bankers from Switzerland -- who were not licensed in the U.S. -- frequently traveled here to woo wealthy Americans interested in setting up secret Swiss bank accounts or shell companies in tax havens such as the British Virgin Islands.

UBS, Switzerland's largest bank, has estimated 19,000 Swiss accounts for U.S. clients with assets valued at $18 billion, according to the subcommittee's report. Along with LGT Bank of Lichtenstein, UBS allowed U.S. clients who sold their U.S. securities to continue to hold undisclosed accounts and to open accounts in the name of non-US entities that were owned by U.S. clients.

Offshore banking is big business for UBS, so much so that other enterprising offshore banks are bound to take up the slack.

"Offshore banking for U.S. clients brought UBS about $200 million in annual revenue, former UBS banker Bradley Birkenfeld said in a statement when he pleaded guilty last month to helping a billionaire UBS client evade U.S. taxes," Bloomberg News report.

Members of Congress have railed for years about off-shore tax havens but have done little about it. The only reason why any noise is being made at all is that this is an election year. I am skeptical that much will change once a new president is elected.

Tags: bradley birkenfeld, BradleyBirkenfeld, mark branson, MarkBranson, swiss banking, SwissBanking, tax havens, TaxHavens, UBS

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Reader Comments (Page 1 of 1)

7-17-2008 @ 11:41PM

Nina Cherryl Fontaine said...

nothing will change. the us government has lost control over everything except the small low income earning people. these people get vote but the government counts and recounts the votes until they elect whom ever the government wants. i am so sorry that this is what america is today.

7-18-2008 @ 7:18AM

Chuck said...

Nothing will change. Since Senators like Ted Kennedy have most, if not all, their money in off shore accounts. Do you think they will vote to cut off their golden fleece. They don't care about us, they only care about themselves and where their next Scotch is coming from.

7-18-2008 @ 2:41PM

Gary Kurzawa said...

Since the tax cheeters do more for there banking then us honest people do you really think for one moment that there will be any change to these tax scammers. I think not!!!

7-30-2008 @ 1:38AM

Salvador Trinxet said...

This is a really surprise. It is difficult to imagine what will happens in the future of offshore banking after this. Maybe other banks will follow, maybe other countries will follow. It is like the finish of the world we currently know, in private offshore banking.

Salvador Trinxet. CEO. Banco Internacional de Investimentos. http://www.bancoii.com

7-30-2008 @ 8:00AM