Switzerland’s landmark decision to allow UBS to pass client data to Washington will tarnish the Swiss franc’s safe-haven allure as the country’s prized bank secrecy laws come under assault. For decades, the Swiss franc has been viewed as the world’s safest currency in times of uncertainty, thanks to the Alpine country’s once vast gold reserves, low inflation, political neutrality and laws protecting banking confidentiality.
But UBS AG’s (UBSN.VX) (UBS.N) agreement last week to disclose about 250 names of U.S. clients to tax investigators raised doubts over the future of Switzerland’s secretive banking industry, fueling fears of capital flight which have weighed heavily on the franc. “The Swiss will now have to become much more compliant with global banking laws,” said Boris Schlossberg, director of currency research at GFT Forex in New York.
UBS AG shares fell to a new all-time low on Tuesday after news the Swiss bank will have to wait until July to fight in court a U.S. bid to force it to disclose client names in a tax fraud probe. UBS, the world’s largest banker to the rich, agreed last week to pay a $780 million fine and disclose the identity of about 300 of its U.S. clients to avert criminal charges, raising hopes the troubled bank could end its U.S. legal problems.
But the following day, U.S. tax authorities said they were still pursuing a civil lawsuit against UBS seeking to access the data of another 52,000 American citizens it says are hiding about $14.8 billion in assets in secret Swiss bank accounts. On Monday, a U.S. judge gave the bank until April 30 to file its response to the case and scheduled a trial for July 13, a UBS spokesman said, adding UBS would “vigorously contest” the enforcement of the summons for the client data. Link.
I tell my students every year, mathematics and accounting doesn’t mean a boring career … accounting is the most sought-after college major for hire by the F.B.I. To find and arrest ‘Big Time’ criminals, it’s always “follow the money”; that’s an accountant packing heat and a badge. But when the track goes cold in Switzerland, those Swissy’s simply profiting by collaborating with criminals.
I think if they do this, the Swiss will find themselves losing clients and money…Big Time!
*There is a new Sheriff in town. We firmly
believe that “Numbered Tax Free Accounts” are
anything but patriotic. The Vatican has had
hundreds of accounts for years. If the list
of so-called Patriotic Americans were released:
It would curl your hair!
The Black economy is bigger than US Steel!!!!
The US and european governments have had it with UBS and they are going to insist that crooks, tax cheats, drug lords and other criminals not be concealed by Swiss banks. UBS in particular had developed a habit of farming up business to people who were trying to avoid paying their taxes to their respective countries. Not cool. UBS stock prices are approaching 52 week lows – that’s what the market thinks about their chances of protecting criminals and successfully fighting suits brought by the IRS- not too much confidence there. The Swiss Franc is also selling off.
Here’s what is developing within this story:
The heightened focus on Switzerland’s role in international financial shenanigans has been years in the making and has picked up momentum in recent months. The landlocked nation’s renowned rules on bank secrecy have come in for criticism from the likes of Alistair Darling, Britain’s top Treasury official, and Peer Steinbrueck, Germany’s finance minister. Sensing an opening, European leaders last weekend said they would make cracking down on tax havens a focus of a summit of the leaders of the Group of 20 nations scheduled for April.
Lets keep our eye on the ball, it is not only UBS htere are hundreds of banks there that do this!
Just wondering, how can the U.S. bring charges against a foreign bank that resides in another country? They may be able to arrest and charge any representatives that are on U.S. soil but what about those in charge in Switzerland? If I were those representatives I would head for home, quick.
UBS just put a new CEO in charge this last Thursday. He is saying that Switzerland should consider changing its banking secrecy laws and stop protecting tax evaders. There is immense political pressure being put upon that small country and Germany, Britain and US are demanding that it open itself up to foreign tax investigations. UBS is at the heart of a US/IRS probe into whether it conspired to defraud the US government of taxes owed by thousands of american clients. Secrecy has made swiss banking successful, but there is talk that some changes will need to be made to insure that the banking business does not assist criminals.
UBS is due to appear before a U.S. Senate committee next week to answer questions about its offshore banking practices.
http://www.iht.com/articles/ap/2009/02/28/business/EU-Switzerland-Banking-Secrecy.php
Like I asked. Does anyone out there know?
How can the U.S. bring charges against a foreign bank that resides in another country? They may be able to arrest and charge any representatives that are on U.S. soil but what about those in charge in Switzerland? If I were those representatives I would head for home, quick.
This is a foreign country that they are trying to, well, invade. This has been their policy for a very long time. Is the U.S. about to decalre war on the Swiss people?
Exactly how are these countries (UK, USA and Germany) going to enforce their wishes against UBS? I don’t get it. Is Hitler back? Maybe so.
The U.S. could not even make a place like Cuba succomb to the embargo. Cuba deserved this treatment because of allowing Russia to place nuclear missles there which would have destroyed the U.S. Now I hear that Hussein wants to be friendly with Cuba. What next? Here come the gambling casinos and lush resorts again. Which wouldn’t actually be all that bad. Keddeny is probably turning over in his grave.
Switzerland has been a friend to the U.S. although neutral (for good reason) in most situations. Will all these bullie countries get together now and place an embargo against the Swiss people?
I still don’t understand what can be done to Switzerland/UBS to force them to reveal these account holders. Sure they can cooperate and hand them over, but I don’t think that they can be forced.
Maybe whichever U.S. officials that are pushing this action will demonstrate during a congressional hearing with Hussein in attendance. Can’t you see it now. Barney Frank and Hussein on the floor, face down slamming their fists into the carpet and yelling “Give us the names. We will give you HOPE.”
I’m disappointed that I don’t have enough money to seek a place like this to hide it. My money in my 401K stock fund has dwindled to less than half of what it was. Since Hussein has taken office, each time he gives his doom and gloom speech the stock market dives even further. He should do as Bill Clinton says and be more optimistic when he speaks. But, of course Hussein likely doesn’t know what he is saying anyway. But, gosh, he sure can deliver a good speech to his flock. I am definitely sorry and more embarassed (to myself) that I voted for this jerk. Look what he is doing to this country. I am not admitting to anyone anymore that I voted for BHO . I just tell them that I voted for the other guys (not McCain). I have somehow woke up and have come out of the trance. Hussein just is not the same person since he got on the throne.
Anyway, off of that topic. What can the U.S. do to force the Swiss people to hand over the names? Anyone know? [Not spell checked.]
fjcer,
The stance that Switzerland and UBS are taking right now is not working. UBS stock is down to about 9 bucks from a 52 week high of over $32 dollars. The Swiss Franc is being sold off steadily too. There is enormous pressure by the bully countries, as you called them, for them to turn over names/account information about tax cheats and other criminals b/c the global recession sucks and those countries want that hidden money. Obviously something’s got to give.
As boring as this may seem, here is my prediction: Swiss rules are going to change when it comes to tax cheats and criminals. Here’s how:
UBS is the poster child for ill-gotten-gains hiding, so replace the top guy. Check. Next tiny Switzerland publically claims that they have always been the safe haven for secret money accounts and that won’t change. Check. The banking rules are very quietly changed so that tax cheats will be handed over to their respective countries ( don’t be suprised if a senator or congress person’s name close to where you live pops up in the mess of names of tax avoiders). UBS takes a dressing down next week so that our public officials will also look like they have our country’s interests at heart. The big three bullies lay hands on some money they need for their coiffers, Switzerland continues to be the big banking capital that it is, the Franc ceases to be punished and UBS stock may or may not recover b/c every scandal needs a scape goat and UBS may need to be the whipping boy.
That’s my guess.
*Another dirty little secret: We are in a World
Global Banking System….and have been for some
time. Write Ben Bernanke and ask him! Gaithner
won’t tell us. But the World Court has egis over
all of it. They are the Gatekeepers and if we pierce that veil…”Ginny barn the door….”
If you were watching C-Span 3 last night, you would have seen the British Banks answering why
they were pumping up Lehman Bros and other US
regular and Investment banks during the meltdown.
They now are having to answer: “We have a lot of
investments in the Global community and we have
to bolster them too! They are part of us!”
The same goes for UBS…they had to write down $60 billion dollars in US Toxic Assets recently.