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Switzerland Government to stop UBS handing over data in U.S. tax row

By Amarendra Bhushan for CEOWORLD Magazine Updated:July 8, 2009

Switzerland Government said it would seize UBS AG data to prevent the U.S. Justice Department from pursuing a U.S. court order seeking the identities of 52,000 American account holders in a crackdown on tax evaders.

The assertion came in court papers yesterday in federal court in Miami, where the Justice Department sued UBS on Feb. 19, a day after the bank avoided U.S. prosecution for helping wealthy Americans evade taxes. The U.S. effort to enforce a summons seeking the names would force UBS to violate Swiss laws barring disclosure of such data, the filing said.

The Swiss government “will use its legal authority to ensure that the bank cannot be pressured to transmit the information illegally, including if necessary by issuing an order taking effective control of the data at UBS that is the subject of the summons,” according to the filing, bloomberg reported.

Wealth management giant UBS is facing a court hearing in Miami next week after refusing to disclose data on 52,000 Americans holders of secret Swiss bank accounts to U.S. tax authorities.

The Swiss Justice Ministry said on Wednesday that Swiss law prevents UBS from handing over client information and the government would seize UBS client data, if necessary, to stop that happening.

The Swiss statement came in response to a filing by the U.S. Justice Department last week asking the Miami court to enforce tax compliance with the full weight of U.S. law.

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Tagged with: UBS AG

odetta

Let us be clear, the Swiss government must defend the laws approved by its people whereas the bank laws fall under the same principle. Switzerland cannot be held accountable for tax loopholes created by the government of the United States of America.

After all they may check their own backyard first before bullying other countries into making them safeguard what they themselves have conveniently missed to do.

There is a well-known place within the United States, as an example: Delaware the most famous place for many powerful corporations to escape the tax man.

ARubinstein

If the Swiss government does make good on its threat to “seize” the banking data, then UBS could argue that it is impossible to comply with a court order to release the data. In other words, the announcement of a Swiss government seizure of data would allow for UBS to claim impossibility of performance. Of course, such a strategy would ultimately fail, because UBS has too much at steak - its valuable banking license in the US, and the huge amount of assets it has in the US, under US jurisdiction and vulnerable to seizure.

wallstreet king

Rubiinstein,

If this administration pushes to reveal this information I wouldn't be surprised if we had another Kennedy scenario on our hands.

I believe this world is alot bigger and smaller than we can imagine and we are meerly puppet s of what the outcome should, could and will be.

david james

Hi Rubinstein,

So if UBS hands over the data to the IRS it is breaking swiss law and if it refuses the US may change the law to make it illegal! Ouch. But I cant see an easy way out since boths sides have so much to lose..Obamas credibility v the basis of the swiss economy. and dont forget the germans!