March 5, 2009
UBS hits out at improper US legal action
The Swiss bank accused the US Government of subjecting it to improper legal action over aiding American tax evaders
Christine Seib in New York
UBS accused the US Government of subjecting it to unproductive and improper legal action
over the troubled Swiss bank’s history of aiding American tax evaders.
Instead, the Government should pursue changes to global tax treaties via diplomatic
channels, UBS said.
On February 19, UBS admitted that it had assisted thousands of Americans to avoid US
taxes by putting their money in offshore accounts, and agreed to pay $780 million in
fines and disclose the names of 250 tax evaders.
But a day later the Inland Revenue Service (IRS) sued UBS for the names of as many as
52,000 other customers that the US tax authorities believe are hiding money in Swiss bank
accounts. The legal action that threatens Switzerland’s legendary banking secrecy.
Related Links
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Ex-UBS banker to admit tax evasion charges
Mark Branson, chief financial officer of the bank’s global wealth management, appeared in
front of the Senate investigations subcommittee on Wednesday to be grilled on UBS’s
long-running dispute with the Inland Revenue Service (IRS).
Mr Branson told the subcommittee that UBS could not reveal the names demanded in the
lawsuit without contravening Swiss banking laws.
“Switzerland and the US are signatories to treaties that specify the circumstances under
which client names and account information located in Switzerland can be shared with US
authorities,” Mr Branson said. “We believe that the [IRS’s case] is inconsistent with
those longstanding treaties.”
He accused the IRS of attempting to resolve a diplomatic dispute between the two
countries via the courtroom. “[This] is neither productive nor proper,” Mr Branson added.
Carl Levin, the Democrat Senator that chairs the subcommittee, has criticised the tax
treaty, which forces Switzerland to co-operate with US tax evasion investigations only if
the IRS can provide specific names of secret account holders.
“The treaty is of very, very limited value,” Senator Levin said.
Americans are allowed to have offshore accounts as long as they report all income on
their earnings to the IRS and disclose if an account holds more than $10,000. But Mr
Levin said that as much as $100 billion was lost to the Government every year because
individuals did not make these disclosures.
He has introduced new legislation containing stronger punishments for offshore tax
evaders, as well as allowing the Treasury to take action against countries that impeded
IRS investigations.
Timothy Geithner, the Treasury Secretary, said yesterday that the White House would
support Mr Levin’s legislation.
Urs Ziswiler, Switzerland’s ambassador to the US, declined to testify at today’s
subcommittee hearing.
Judy Miriga
Diaspora Spokesperson &
Executive Director
Confederation Council Foundation for Africa Inc.,
USA
http://socioeconomicforum50.blogspot.com/
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Date: Sun, 29 Mar 2009 09:51:54 -0700 [11:51:54 AM CDT]
From: Judy Miriga
Subject: UBS hits out at improper US legal action