Tax Law

US Clients of UBS Mull Options as Feds Press Swiss Bank to Name More Names


Contending that a Swiss bank’s plan to name client names to U.S. regulators as part of a $780 million settlement of a criminal tax probe violates Switzerland law requiring secrecy, American depositors are mulling their options.

Attorney Andreas Rued of the Rued Winkler law firm in Zurich said unnamed UBS AG clients will soon decide whether to pursue a criminal complaint against Finma, as the Swiss Financial Market Supervisory Authority is known, over the claimed violation of Switzerland law, reports Dow Jones.

“Article 25 and 26 of Swiss banking law are meant to provide security for banks, not to circumvent banking secrecy,” he tells the news agency.

Meanwhile, depositors around the world reportedly are concerned that the decision is the beginning of the end of the country’s renowned secret bank accounts.

As discussed in an earlier ABAJournal.com post, the settlement agreement in the criminal probe affects only about 250 U.S. customers. However, a federal judge in Florida last year authorized the U.S. Internal Revenue Service to issue a subpoena requiring UBS to disclose a far greater number of customer identities.

Although that subpoena, so far, has not been enforced, and can still be contested by the bank, the government, in an apparent effort to take the dispute to the next level, made a filing in federal court in Miami today seeking to require UBS to name more names, according to Reuters.

If the government is successful, that could result in the identities of as many as 52,000 more U.S. account-holders being revealed to the feds, reports Bloomberg.

“At a time when millions of Americans are losing their jobs, their homes and their health care, it is appalling that more than 50,000 of the wealthiest among us have actively sought to evade their civic and legal duty to pay taxes,” says acting assistant attorney general John DiCicco of the Justice Department’s tax division, in a written statement.

Related coverage:

ABAJournal.com (2008): “IRS Isn’t Just Pursuing UBS Clients; Auditors to Look at Other Foreign Banks”

Bloomberg: “UBS May ‘Open Floodgates’ of Tests to Bank Secrecy”

Updated at 3:04 p.m. to add additional Bloomberg coverage.

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