The U.S. wants UBS to reveal the identities of 52,000 rich Americans suspected of using secret bank accounts as a tax dodge. Such a move would be a violation of Switzerland's bank secrecy laws, the Swiss government and UBS say. According to Reuters, the two sides are hoping to find a way to allow the U.S. government to receive client data without violating Swiss law.
One possibility is a payment from UBS. If a settlement is reached, it could affect Swiss privacy laws because it would include a transfer of some client data. Nevertheless, it could help UBS move on from this ugly little spat.
I remember hearing about Swiss bank accounts on TV and in the movies as I was growing up. I never knew there really was such a thing. That said, it appears that roughly 7,000 of the accounts will draw scrutiny and be subject to the settlement as they are linked to offshore companies and trusts. These companies and trusts are more prone to fraud, so watch for a careful inspection of these accounts. The Wall Street Journal noted that "at least another 17,000 of the accounts are for individuals and are therefore less suspect."
Deal or no deal between the Swiss bank and the U.S. government, it certainly appears that the U.S. will demand that at least some of the names should be revealed. The Department of Justice noted yesterday that it will still step up its legal efforts against UBS if necessary, and it will require data on "a significant number" of UBS's clients. This is a good move, as the simple notion of a Swiss bank account conjures up images of fraud -- at least that is the way I remember it from the likes of Magnum P.I. and The A-Team.
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Reader Comments (Page 1 of 1)
7-14-2009 @ 8:09AM
tom vanyo said...
The US is embarassing itself by trying to get another country to break its laws just to please us.
The US should keep our nose out of other countries business. We should not bully the Swiss. Obama said “we will have a new public image with foreign countries. “We will listen and learn and not dictate our policies to other countries” (paraphrasing) A typical politicians lies. I am sure he meant that statement with countries who might slap us back, like North Korea,etc.
If the Swiss had the “bomb” the US would not be demanding anything from them. But as the Swiss cannot fight back, we will roll them over with our power.
If the Swiss demanded we turn over the names of Swiss citizens to their country that have accounts in our banks, we would laugh at them. It would be against our “privacy laws”. How about if Iran demanded the names of their citizens that are living or visiting the US that are breaking their laws i.e partying, dressing sexy, dancing,etc. (a crude example, but you get the picture) The US is a tax haven for foreign investors. Non resident aliens pay no tax on interest earned in US banks. If we are successful in getting the Swiss to release those names, the EU countries will use that as a precedent to get the names of their citizens that are banking in the US. Then those EU citizens will take their money out of our banks and our banks, economy will COLLAPSE!
We need the low tax countries to keep tax competition alive, Without tax competition, governments all over the world, including the US can raise taxes with no recourse. go to http://www.cato.org
7-14-2009 @ 1:55PM
Daniel said...
The Swiss can't fight back? I think you underestimate the military preparation every Swiss man undergoes. They may not have a standing military, but they can fight if they need to.
Interesting thing about this: politicians say we need to prop up our crumbling banks and then turn right around and attack one of the strongest banks in the world.
I expect the US will fold on this. They'll use it to scare US investors into ratting themselves out (as some already have), and that's all they'll be able to get (well, maybe a concession of a few hundred million if the Swiss are feeling generous)
According to one video, "1/3 of internationally invested private wealth is still kept in Switzerland." (video at http://www.newsy.com/videos/timeout_of_the_titans) Does the US really think Switzerland will give up that kind of market share? Ireland and Bermuda are already poised to grab a piece of the game if the Swiss give in.