It tells Senate it regrets breaking US tax laws; calls for diplomatic resolution
Reuters 6 March 2009
(WASHINGTON) Switzerland’s largest bank held its ground on Wednesday in a dispute with the US government, refusing to disclose the names of tens of thousands of rich American clients suspected by US authorities of using secret Swiss bank accounts to dodge US taxes.
A senior executive for UBS AG said at a Senate hearing that the bank regrets breaking US tax laws, but it does not intend to hand over the client names being sought in a US Internal Revenue Service (IRS) lawsuit. ‘UBS has now complied . . . to the fullest extent possible without subjecting its employees to criminal prosecution in Switzerland,’ said Mark Branson, chief financial officer of UBS Global Wealth Management and Swiss Bank.
The hearing convened hours after UBS announced that Swiss politician Kaspar Villiger will replace Peter Kurer as its chairman, completing a top management clearout designed to drag the beleaguered bank out of its deepest-ever crisis.
‘We deeply regret our breaches of US laws,’ Mr. Branson told the Senate Permanent Subcommittee on Investigations at a hearing focused on offshore tax havens. He called for a diplomatic resolution, rather than protracted court proceedings, over the IRS efforts to get data from UBS on roughly 48,000 US accounts, down from an earlier estimate of 52,000.
UBS last month acknowledged responsibility for helping US clients conceal assets from the US government. UBS also agreed to pay a US$780 million fine, and to identify some US clients, in a legal deal that resolved criminal fraud charges.
US authorities, fearing that the agreement might yield very few names, then filed the civil lawsuit against UBS. UBS argues that the information sought by the United States is protected by Swiss financial privacy laws. ‘The IRS is attempting to resolve this diplomatic dispute in a courtroom, which is neither productive, nor proper,’ said Branson.
In a showdown that is threatening Switzerland’s cherished tradition of banking secrecy, subcommittee chairman Senator Carl Levin grilled Mr. Branson over the bank’s conduct and at one point became frustrated with his replies.
‘Your answers are needlessly evasive, it seems to me,’ he said to Mr. Branson during the hearing. ‘We have problems with your bank . . . But we also have very serious problems with the Swiss secrecy laws.’
‘We may not be able to change your law but we’re going to do everything we can to pass a law here . . . I hope you’ll take that message back to your bank,’ said the Michigan Democrat.
World leaders from the Group of 20 are set to gather in London next month, where they could add Switzerland to a blacklist of nations that foster tax cheats.
Mr. Levin and Democratic colleagues this week introduced legislation into Congress to crack down on tax havens.
The Obama administration on Tuesday endorsed the Bills filed in both the Senate and the House of Representatives.
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UBS resists giving US clients’ names
It tells Senate it regrets breaking US tax laws; calls for diplomatic resolution
Reuters
6 March 2009
(WASHINGTON) Switzerland’s largest bank held its ground on Wednesday in a dispute with the US government, refusing to disclose the names of tens of thousands of rich American clients suspected by US authorities of using secret Swiss bank accounts to dodge US taxes.
A senior executive for UBS AG said at a Senate hearing that the bank regrets breaking US tax laws, but it does not intend to hand over the client names being sought in a US Internal Revenue Service (IRS) lawsuit. ‘UBS has now complied . . . to the fullest extent possible without subjecting its employees to criminal prosecution in Switzerland,’ said Mark Branson, chief financial officer of UBS Global Wealth Management and Swiss Bank.
The hearing convened hours after UBS announced that Swiss politician Kaspar Villiger will replace Peter Kurer as its chairman, completing a top management clearout designed to drag the beleaguered bank out of its deepest-ever crisis.
‘We deeply regret our breaches of US laws,’ Mr. Branson told the Senate Permanent Subcommittee on Investigations at a hearing focused on offshore tax havens. He called for a diplomatic resolution, rather than protracted court proceedings, over the IRS efforts to get data from UBS on roughly 48,000 US accounts, down from an earlier estimate of 52,000.
UBS last month acknowledged responsibility for helping US clients conceal assets from the US government. UBS also agreed to pay a US$780 million fine, and to identify some US clients, in a legal deal that resolved criminal fraud charges.
US authorities, fearing that the agreement might yield very few names, then filed the civil lawsuit against UBS. UBS argues that the information sought by the United States is protected by Swiss financial privacy laws. ‘The IRS is attempting to resolve this diplomatic dispute in a courtroom, which is neither productive, nor proper,’ said Branson.
In a showdown that is threatening Switzerland’s cherished tradition of banking secrecy, subcommittee chairman Senator Carl Levin grilled Mr. Branson over the bank’s conduct and at one point became frustrated with his replies.
‘Your answers are needlessly evasive, it seems to me,’ he said to Mr. Branson during the hearing. ‘We have problems with your bank . . . But we also have very serious problems with the Swiss secrecy laws.’
‘We may not be able to change your law but we’re going to do everything we can to pass a law here . . . I hope you’ll take that message back to your bank,’ said the Michigan Democrat.
World leaders from the Group of 20 are set to gather in London next month, where they could add Switzerland to a blacklist of nations that foster tax cheats.
Mr. Levin and Democratic colleagues this week introduced legislation into Congress to crack down on tax havens.
The Obama administration on Tuesday endorsed the Bills filed in both the Senate and the House of Representatives.
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