07.04.09
Swiss banks boot US clients
Written by Janet
It appears that many Swiss bank executives have come to the conclusion that clients from the US are no longer worth all the trouble with U.S. tax authorities. The UBS is embroiled in a dispute with the Internal Revenue Service where they are demanding information on 52,000 clients.
Other banks now fear that a similar action would force them to open their books. Stefan Kern, a spokesman for Bank Raffeissen, said, they are recommending their banks not to open any new client relations to clients living in the U.S.
US citizens now living in Switzerland are having trouble opening bank accounts.
Lawrence Desmond, who holds dual citizenship, said UBS gave him 45 days to close his account or transfer it to a special unit registered with the IRS. Because he holds a Swiss passport, Desmond, who said he likes to keep some money is Switzerland as a convenience for his visits there, was able to open a post office account.
Eileen said,
07/04/2009 at 12:32 pm
If you lived there, I see no problem with getting the accounts. But just for avoiding taxes in the US, no…
Tony said,
07/04/2009 at 8:02 pm
Not if it’s used to avoid taxes…..
tim vanovickoyo said,
07/05/2009 at 7:42 am
Apparently, the citizens of the US are blinded by their “greed” for “lost” tax dollars and are not seeing the real damage that will be caused by our gov’ts bullying of the Swiss. The EU countries will use this as a precedent for getting the names of their citizens that have money in US banks so that those citizens will have to pay taxes in their home country. Non resident aliens pay no taxes on interest income on money earned in the US. If the US gov’t succedes in forcing the Swiss to comply with our tax laws(which is laughable), The EU countries will immediatly come after their citizens in the US. Their citizens will take their money out of our banks and our economy and banks will COLLAPSE!
newsdeskinternational said,
07/08/2009 at 1:52 pm
Swiss to stop UBS handing over data in U.S. tax row
I can’t say that I blame them….once you have money overseas, that’s it….the US has no right to the information unless it’s proven illegal activities involved…
Switzerland has vowed to prevent UBS from handing over client information to U.S. authorities, in an attempt to defend bank secrecy, saying a tax case targeting its main bank is souring diplomatic ties.
http://www.reuters.com/article/domesticNews/idUSTRE5672DM20090708?sp=true
Dave said,
07/08/2009 at 7:03 pm
That is a Swiss problem, not under US jurisdiction…therefore, you go by Swiss laws….who is Obama to say they have the right to demand anything? What if the role was reversed?
newsdeskinternational said,
07/12/2009 at 11:09 am
US, Swiss ask for delay in UBS secrecy case
The U.S. and Swiss governments and banking giant UBS AG indicated Sunday they were seeking a settlement and asked a federal judge to delay high-stakes hearings on the Internal Revenue Service’s effort to identify thousands of suspected American tax evaders.
The one-page motion, filed in Miami less than 24 hours before the hearings were to begin Monday, said postponement is needed “to allow the two governments to continue their discussions seeking a resolution of this matter.”
Unless a deal is reached beforehand, the filing asks that the hearing be rescheduled for Aug. 3.
U.S. District Judge Alan S. Gold did not immediately rule on the request, but judges routinely allow parties in civil cases extra time to settle out of court. Such a deal would likely include a large penalty against UBS and possibly require the bank to reveal at least some names, tax experts say.
The case seeking the identities of some 52,000 wealthy American clients suspected of hiding $15 billion at UBS has already sent shock waves through the international banking system.
Bankers fear a ruling against UBS would disrupt cross-border commerce, force people to withdraw huge sums of money from financial entities with offshore offices and play havoc with international tax treaties. Experts say some other foreign banks are asking American clients to close out accounts for fear they may be targeted next.
“The precedent this case may set is of immediate relevance to all financial institutions with global operations,” the Institute of International Bankers and other financial organizations said in a recent court filing.
The UBS case has persuaded hundreds of taxpayers with offshore accounts to come clean with the IRS under a voluntary disclosure program. The program allows most people to pay a fine and back taxes without facing criminal prosecution, said tax attorney Robert McKenzie with the Arnstein & Lehr firm.
“The IRS would like to continue the specter of fear that this UBS case has created,” McKenzie said. “This strategy is working. The level of calls I’m receiving is picking up, not going down.”
UBS, which previously admitted wrongdoing in a more limited U.S. tax case, is resisting turning over the names that have been protected by centuries-old Swiss banking secrecy laws.
“Honoring the IRS summons would require UBS to violate Swiss criminal law, and we simply cannot comply,” said Oswald Gruebel, UBS chief executive officer, in a letter to bank offices worldwide. “This matter should be resolved between governments according to established frameworks.”
The Swiss government escalated the dispute last week by threatening to block release of the UBS account names if Gold rules for the IRS.
One of Europe’s biggest banks, UBS has about 34,000 permanent and contract employees at 381 locations in the U.S., according to the company.
The IRS in February filed what are called a “John Doe summonses” seeking U.S. taxpayer identities from UBS, shortly after the Zurich-based bank reached a deferred prosecution agreement with the Justice Department over its tax evasion practices. UBS agreed then to identify 300 people – some of whom are now facing criminal charges – and admitted it wrongly used sham offshore entities, false paperwork and questionable client recruitment.
UBS also paid a $780 million penalty.
“Until its activities were discovered, UBS – on U.S. soil – regularly violated U.S. law, and actively helped its customers violate U.S. law,” said Justice Department tax attorney Stuart Gibson, the lead U.S. lawyer on the case.
The 300 names were released under an exception to Swiss banking secrecy law when clients deliberately defrauded tax authorities, as opposed to failing to declare all assets.
Abusive tax shelters and hidden offshore accounts cost the U.S. government an estimated $100 billion a year in lost tax revenue, according to Michigan Sen. Carl Levin, chairman of the Senate Permanent Subcommittee on Investigations.
The Justice Department has brought several other UBS-related tax cases in South Florida, including a November 2008 indictment charging former bank executive Raoul Weil with conspiring to defraud the government. Weil, who ran UBS cross-border and private banking operations, is a fugitive living in Switzerland, and his lawyer has insisted he is innocent.
In June 2008 former UBS banker Bradley Birkenfeld pleaded guilty to a similar charge – he helped a California billionaire evade taxes – and has been cooperating extensively with federal prosecutors and the IRS. He has not yet been sentenced.
hexiemystique said,
07/12/2009 at 5:50 pm
IF and I mean IF I had large amounts of money, I too would invest that in Swiss banks, and NO, I would have no scruples avoiding taxes elsewhere.
Have you seen the interests rates Britain offers????????
Who in their right mind would ’save’ large amounts in Britain!!
hexie
tim vanovickoyo said,
07/13/2009 at 5:46 am
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 out “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)
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
CarrieLynn said,
07/13/2009 at 10:49 am
The U.S. should but out….that is Switzerland, a nation of its own….with its own laws….how would the US like it if they came in telling us what to do?
If you live there, or toss your money in to a foreign bank, more power to them….the government takes enough from us as is….
newsdeskinternational said,
08/12/2009 at 10:22 am
US, Swiss cement deal on secret UBS bank accounts
The U.S. government and Swiss banking giant UBS AG have reached an agreement in a case seeking names of some 52,000 suspected American tax evaders with billions in secret Swiss accounts, but details may remain under wraps until next week, officials said.
http://news.yahoo.com/s/ap/20090812/ap_on_bi_ge/us_ubs_secrets;_ylt=At4P0hdX.HNoC64kZgSUmytvzwcF;_ylu=X3oDMTJqZmJiZ2dpBGFzc2V0A2FwLzIwMDkwODEyL3VzX3Vic19zZWNyZXRzBHBvcwMxBHNlYwN5bl9hcnRpY2xlX3N1bW1hcnlfbGlzdARzbGsDdXNzd2lzc2NlbWVu