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Friday 20 February 2009
UBS refuses US demand
Swiss banking giant UBS has refused a US government demand to provide information on 52,000 US clients, requested in a lawsuit filed earlier in the day as part of a tax fraud investigation.
WASHINGTON - Swiss banking giant UBS has refused a US government demand to provide information on 52,000 US clients, requested in a lawsuit filed earlier in the day as part of a tax fraud investigation.
The US government filed a lawsuit in a Miami, Florida asking the court to order UBS to reveal to the US tax authorities the identities of the bank’s US customers - identified with the moniker ‘John Doe’ - ‘with secret Swiss accounts,’ the Justice Department said.
‘UBS believes it has substantial defenses to the enforcement of the John Doe summons and intends to vigorously contest the enforcement of the summons in the civil proceeding,’ the Swiss bank said on Thursday, citing a deal with the Justice Department to cooperate in the tax probe reached Wednesday.
In the suit filed in Miami, the Obama administration wants UBS to turn over information on as many as 52,000 US customers who concealed their accounts from the US government in violation of tax laws.
‘At a time when millions of Americans are losing their jobs, their homes, and their health care, it is appalling that more than 50,000 of the wealthiest among us have actively sought to evade their civil and legal duty to pay taxes,’ the acting assistant attorney general, John DiCicco, said in a statement.
A deal announced on Wednesday provides access to about 250 to 300 UBS customers who used Swiss bank secrecy laws to hide assets.
To avoid prosecution, UBS agreed to pay US$780 million (S$1.2 billion), which Justice Department officials said was the largest ever in a criminal tax case.
The bank’s chairman, Peter Kurer, said UBS accepted ‘full responsibility’ for helping its US clients conceal assets from the Internal Revenue Service.
But that does not mean the bank is about to fork over information on thousands of accounts.
On Wednesday, the government claimed in court papers there were close to 20,000 US clients who hid assets through the UBS programme.
A day later, the number had climbed to 52,000. US officials offered no immediate explanation for the revised estimate, but it was another sign they are raising the pressure on the Swiss bank.
Hours before the new suit, Switzerland’s president, Hans-Rudolf Merz, said his country will not relent in defending its treasured tradition of confidential bank accounts.
‘Banking secrecy, ladies and gentlemen, remains intact,’ Mr. Merz told reporters.
Mr. Merz said Swiss authorities handed over the files on the 250 to 300 American clients of who are suspected of tax fraud. The transfer took place in the middle of the night in the Swiss capital, Bern, just ahead of a US deadline for Swiss cooperation, he said.
But US officials want much more. According to Thursday’s filing, the thousands of accounts in question held about US$14.8 billion in assets in the past decade.
Mr. Merz, UBS and Switzerland’s financial regulator insist that Thursday’s handover was not a retreat from the principle of banking secrecy because it involved only a small number of files linked to tax fraud - and not tax evasion.
Under a 75-year-old law, Swiss banking secrecy can only be lifted when individuals are deemed to have deliberately defrauded tax authorities, as opposed to failing to declare all assets. That is a distinction only Switzerland and other tax havens make.
Experts said the decision to bypass the courts and give up customers before exhausting all legal options seriously endangers a pillar of the banking industry that helped transform Switzerland into one of the world’s richest countries.
1 comment:
UBS refuses US demand
AFP
20 February 2009
WASHINGTON - Swiss banking giant UBS has refused a US government demand to provide information on 52,000 US clients, requested in a lawsuit filed earlier in the day as part of a tax fraud investigation.
The US government filed a lawsuit in a Miami, Florida asking the court to order UBS to reveal to the US tax authorities the identities of the bank’s US customers - identified with the moniker ‘John Doe’ - ‘with secret Swiss accounts,’ the Justice Department said.
‘UBS believes it has substantial defenses to the enforcement of the John Doe summons and intends to vigorously contest the enforcement of the summons in the civil proceeding,’ the Swiss bank said on Thursday, citing a deal with the Justice Department to cooperate in the tax probe reached Wednesday.
In the suit filed in Miami, the Obama administration wants UBS to turn over information on as many as 52,000 US customers who concealed their accounts from the US government in violation of tax laws.
‘At a time when millions of Americans are losing their jobs, their homes, and their health care, it is appalling that more than 50,000 of the wealthiest among us have actively sought to evade their civil and legal duty to pay taxes,’ the acting assistant attorney general, John DiCicco, said in a statement.
A deal announced on Wednesday provides access to about 250 to 300 UBS customers who used Swiss bank secrecy laws to hide assets.
To avoid prosecution, UBS agreed to pay US$780 million (S$1.2 billion), which Justice Department officials said was the largest ever in a criminal tax case.
The bank’s chairman, Peter Kurer, said UBS accepted ‘full responsibility’ for helping its US clients conceal assets from the Internal Revenue Service.
But that does not mean the bank is about to fork over information on thousands of accounts.
On Wednesday, the government claimed in court papers there were close to 20,000 US clients who hid assets through the UBS programme.
A day later, the number had climbed to 52,000. US officials offered no immediate explanation for the revised estimate, but it was another sign they are raising the pressure on the Swiss bank.
Hours before the new suit, Switzerland’s president, Hans-Rudolf Merz, said his country will not relent in defending its treasured tradition of confidential bank accounts.
‘Banking secrecy, ladies and gentlemen, remains intact,’ Mr. Merz told reporters.
Mr. Merz said Swiss authorities handed over the files on the 250 to 300 American clients of who are suspected of tax fraud. The transfer took place in the middle of the night in the Swiss capital, Bern, just ahead of a US deadline for Swiss cooperation, he said.
But US officials want much more. According to Thursday’s filing, the thousands of accounts in question held about US$14.8 billion in assets in the past decade.
Mr. Merz, UBS and Switzerland’s financial regulator insist that Thursday’s handover was not a retreat from the principle of banking secrecy because it involved only a small number of files linked to tax fraud - and not tax evasion.
Under a 75-year-old law, Swiss banking secrecy can only be lifted when individuals are deemed to have deliberately defrauded tax authorities, as opposed to failing to declare all assets. That is a distinction only Switzerland and other tax havens make.
Experts said the decision to bypass the courts and give up customers before exhausting all legal options seriously endangers a pillar of the banking industry that helped transform Switzerland into one of the world’s richest countries.
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