U.S. Wants UBS to Break Swiss Law By Naming Clients, Bank Says

[Turborama]

Source: Bloomberg

By David Voreacos and Carlyn Kolker

U.S. efforts to force UBS AG, Switzerland’s largest bank, to disclose the names of 52,000 American customers would require the bank to violate Swiss sovereignty and criminal law, bank lawyers said.

A U.S. lawsuit filed yesterday improperly seeks to enforce summonses from the Internal Revenue Service for the identities of account holders and would trample on Swiss sovereignty, according to a UBS filing yesterday in federal court in Miami.

“Swiss law strictly prohibits UBS and its employees from disclosing to the IRS the account information located in Switzerland that the IRS seeks,” UBS lawyers wrote. “The IRS’s petition does not acknowledge these restrictions and instead simply ignores the existence of Swiss law and sovereignty.”

The filing is the bank’s first legal response to a lawsuit that would enhance tax collection by striking a blow at historic Swiss bank secrecy. The U.S. sued one day after Zurich-based UBS agreed to pay $780 million and disclose the names of about 250 customers to defer prosecution on a charge that it conspired to help wealthy Americans evade U.S. taxes over several years.

By trying to force disclosure, the IRS seeks to expose bank employees to “substantial prison terms, as well as fines, penalties and other sanctions,” bank lawyers wrote. The IRS also wants a judge to force UBS “to violate Swiss law in a manner that will expose it to penalties, civil liability and the possible revocation of its banking license.”

Read more: http://www.bloomberg.com/apps/news?pid=20601087&sid=ae6O77_fTfv4&refer=home

[byeya]

1. The USA has the clout{still} to do it, so keep the pressure

on, Pres Obama

[Lucky Luciano]

6. It is also easy to keep the pressure on UBS as

that bank has been severely tarnished in the last couple years and is considerably weaker...I actually got laid off from there four months ago, though I need a different job quickly....probably a blessing in the end and I have even considered some Silicon Valley startups that just got funded in lieu of trading...all who remain there are severely depressed and miserable now that the party is over.

[fasttense]

2. If it is against the law to reveal tax cheats, then it is a bad law. n/t

[ProgressiveProfessor]

20. Problem is that not all account holders are tax cheats

The US wants the names of all US account holders. Swiss law will not allow that to happen. IIRC, the US has to ask by name with some supporting documentation. Then and only then can the Swiss banks answer, assuming that they even know.

[clixtox]

3. A treaty! Hah... The USA is notorious for breaking treaties!

Ask any American Indian about treaties!

The last time I checked the Swiss barely had an army, other than the guys within Italy guarding the Pope and Vatican City.

A navy? Maybe in the Swiss portion of Lake Geneva?

No nukes!

They best shut-up and follow orders from Uncle Sam.

Ole Uncle Sam is vicious, heartless and apt to do absolutely anything including dropping an A-Bomb on innocent civilians.

Slip/ship us the depositors/tax scofflaws names pronto!

Or else!

We will get you!

You too!

Might makes right!

Just like in Panama when we kidnapped, as a supposed "war criminal", our own CIA creation, Manuel "Pizza Face" Noriega, while coincidently murdering about 2000 innocent Panamanians as just so much "collateral damage".

(By the way, Noriega was supposed to be released from our prison in September 2007 according to the sentence he received after the conviction in our "kangaroo court". Justice? To laugh at the irony!)

[FarCenter]

11. Switzerland has universal conscriptioin

Swiss keep their rifles and sealed tins of ammunition at home. Under age 30, there is a requirement for regular training and target practice.

We should know by now not to mess with guys with rifles in the mountains.

[lovuian]

16. there a haven for those who want to hide

and sometimes a Haven is a good thing

But Swiss branched out too big now they pay the price

[FarCenter]

19. They probably regret buying Paine Webber

On November 3, 2000, the company, under the leadership of Chairman and CEO, Donald Marron, merged with UBS AG, a banking conglomerate headquartered in Zurich, Switzerland. The acquisition pushed UBS to the top Wealth and Asset Management Firm in the world. Initially the business was given the divisional name "UBS PaineWebber" but in 2003 the 123-year-old name Paine Webber disappeared when it was renamed "UBS Wealth Management USA."

From http://en.wikipedia.org/wiki/Paine_Webber

[ProgressiveProfessor]

18. Your lack of knowledge of the Swiss military is amusing

They have a totally integrated civilian/military comparable to the Israelis and would be fighting on home turf. They have front line US aircraft and damn near every home has weapons and ammunition. Even Hitler chose not take them on.

[clixtox]

24. Having just perused the Wikipedia info, and other sources...

I now know a lot more than I did before, professor! Despite your "talking them up" their army isn't actually a serious endeavor like those in most other, especially European, countries.

Their army has little in common with that of Israel except the reputedly high % of the population involved. They are surely not anywhere as near to being combat ready troops as the Israelis. To provide security during the yearly economic forums in Davos, for example, they have to hire police from Germany. While they do have aircraft, they are not up-to-date like the Israeli Air Force, or their neighbors. They have been downsizing their army for the last two decades due to pressure from Swiss realists/pacifists who want to completely disband what army they do have now.

I am sure that Hitler had his reasons for not invading Switzerland but fear of their army certainly wasn't a major consideration. If they had desired to invade with Italy allied, Switzerland wouldn't have been able to hang on for long, IMHO!

In reality if faced today with a serious threat from a rabid, known heartless, and bloodthirsty enemy with overwhelming forces, employing all of the latest technologies, like the USA for example, they would have no choice but to lay down their meager rifles and park their almost twenty year old F/A18s (definitely not "front line") which would be quickly destroyed by todays vastly upgraded fighter jets utilized by the more sophisticated Air Forces of the USA or NATO's. Not that it would ever come to that...

Switzerland today is very much like their fictional neighbor, the "Duchy of Grand Fenwick" when it comes to military "might". At its most menacing and on its best day it's still basically a "Mouse that Roared"! If it dared to roar...

Amusing for sure but not much more!

[wuushew]

29. and most likely Switzerland was always more pro-German than anti

Every year we learn more about how Nazi gold mysteriously found its way into Swiss vaults.

[Vinnie From Indy]

34. True that!

The Swiss also have an additional weapon to defend their nation - their secretive banking practices. Call it professional courtesy if you will, but it is likely that any nation that threatened the trillions of dollars stashed away on the books of their banks would instantly face the ire of the world's most ruthless and powerful people. The Swiss have been the bankers for the world's elites and criminal element for over a century. Attacking the country would instantly gain the attackers some very powerful enemies.

[wuushew]

28. Napoleon was successful mind you

no country is invincible.

[clixtox]

31. BTW, your smugness is hilarious, the first time...

Having much knowledge about the Swiss army/military right off the top of one's head would be a bit unusual, wouldn't you say?

I hope that you would agree with me a bit more now... If not, OK!

Your gratuitous jibe was not appreciated, your post is only correct about Hitler not invading Switzerland so your headline is probably a projection of your own ignorance, or misconceptions engendered by your natural ingenuousness.

The Swiss army is a relatively inexpensive joke, especially compared to our ridiculously expensive USA military, which is certainly not a laughing matter!

We customarily have used intimidation diplomacy to ride roughshod over weaker contemporaries/nations, those who were unable to retaliate effectively.

Voila!

The arms race!

Nuclear proliferation!

And those countries who intelligently refuse to participate, choose not to develop their own devices to insure mutual assured destruction, are especially susceptible to intimidation, like Pakistan, Syria, Iran, India and even North Korea. Without their own missiles, and nuclear weapons, they will remain vulnerable to those scary nuclear nations like Israel, China, Russia and the USA. All of these have recently perpetrated sordid wars using tactics of mass murder.

War crimes!

Can anyone blame some of the weaker nations for being hellbent on doing what is necessary from their perspective to protect themselves, although the costs are prohibitive and the dangers evident on many levels, in many ways.

Disarming the world, starting in the USA, would be smart, although so unlikely as to be laughable!

We are doomed!

It is just a matter of time...

[MannyGoldstein]

4. They Already Exposed 250

We should start an embargo of Switzerland until they cough up everything.

[pjt7]

5. UBS needs to be taken down for many crimes

If they don't cooperate 100% take these crooks down for good.

[Baby Snooks]

7. So where are the 250 indictments?

They just want the whole list so they can "pick and choose" who to prosecute. To keep everyone in their place.

I bet not one of the 250 is indicted. They probably are all clients and friends of Phil Gramm. Who will also be kept in their place.

There will be lots of prosecutions of the Leona Helmsleys and the Mark Riches. And no prosecutions of the Phil Gramms.

I forget the actual law in Switzerland but those 250 must have done something illegal under Swiss law for UBS to have named them. I doubt the Swiss courts will allow any further disclosure unless there is violation of Swiss law involved. As I recall, that was a major issue in the Mark Rich matter. He had not violated any Swiss law. So the US was denied access to his financial records. Which forced settlement of a civil matter. Los of things we were lied to about Mark Rich. Mainly how he was maliciously prosecuted by Rudy Giuliani which the Justice Department blocked because they considered it a civil matter rather than a criminal matter. The pardon was to prevent Rudy Guiliani from having him indicted again once the Bush Administration put its Justice Department in place. Which to some degree is still in place. He was prosecuted for the same reason Leona Helmsley was. He was an easy target for Rudy Guiliani. And he was Jewish.

I still say there is something missing in the Bernie Madoff matter and he was set up by someone who knew if they could wipe him out they would wipe out a large portion of the liberal wealth in this country.

UBS should be prosecuted. It should have already been indicted. But if UBS is indicted, Phil Gramm will be indicted. The Bushes among others will see to it he is not indicted. Some like Ken Lay get thrown under the bus. Some like Phil Gramm are kept on the bus.

[bluesmail]

12. I so agree, Bernard Madoff was set up for the exact reason

you wrote. IMO :evilgrin:

[Frank Booth]

23. You're defending Marc Rich, Leona Helmsley and Bernie Madoff??

I guess there's always a first.

[Baby Snooks]

13. You must be joking...

The Swiss don't need nuclear weapons. They have their banks. And their banks are what you call "cash and carry." And an estimated 1/3 of the world's cash deposits are in Swiss banks. You embarge them, they cut off access to your funds. They are also a major overnight lending market. They could cause total collapse of the world's economy by pulling out.

The Swiss government is also on the gold standard and probably has 1/3 of the world's gold stored away in massive vaults underneath the Alps.

That gold standard is one reason why many wealthy Americans legitmately opened accounts in Swiss banks after Nixon decided to dump the gold standard and replace it with the funny money standard.

The Swiss laugh at the funny money. And at this point at the stupidity of Americans for believing in the funny money.

[Lucky Luciano]

22. The Swiss abandoned the gold standard 10 years ago.

The US has the biggest gold reserves in the world actually...but yet of course, we do have fiat funny money.

[KansDem]

14. Is there a published list of these 250?

I'd like to see it...

[Lasher]

8. This is bullshit.

A plague of rats will descend on the USA if we dare even think about spending the borrowed stimulus money exclusively on US goods and services. And yet the Swiss continue with impunity to launder money for these sinister criminals? Ban imports of their army knives and cheese, that'll show 'em!

[Frisbee]

10. That does it!!!

No more Swiss Miss hot chocolate for me until they release ALL the names! :donut:

Seriously though, I bet there are some VERY powerful people in that list, and getting them will require a lengthy and difficult battle. It is one worth waging though, and I hope the pressure continues until all is known about these tax cheats.

[KansDem]

15. Hell, yeah!!! From now on it's "Freedom" Miss hot chocolate!

"Freedom" cheese and "Freedom" army knives!!!

HELL, YEAH!!! :grr:

[Gregorian]

25. Please! Think of the Lederhosen!

Young boys the world over would suffer.

[acmavm]

9. And here just yesterday we were commenting on how few of the names

of account holders had been released and wondering why they names were ekeing, not being released en masse.

[Ghost Dog]

17. The world's biggest tax haven is the USA; mainland UK second biggest:

information posted in Friday's Stock Market Watch thread: http://www.democraticunderground.com/discuss/duboard.php?az=show_mesg&forum=102&topic_id=3747988&mesg_id=3748137

The world's biggest tax haven is the USA. That's as long as you're not a citizen or resident alien.

The world's biggest tax haven is the United States. We have very competitive tax and privacy laws for overseas investors, and this has helped attract more than $5 trillion of foreign capital to our economy. Other havens, such as Switzerland with $2 trillion and the Cayman Islands with less than $1 trillion, are minor league compared to America.

I don''t like quoting the Heritage Foundation, but this is something the mainstream media doesn't report, among many others. We help citizens of other countries evade their taxes.

http://www.heritage.org/press/commentary/ed100501.cfm
____

The UK is the world's second largest tax haven after the USA. Even during the worst years of old left wing socialist Labor government, the City's nominee to head the Bank of England got the job. Foreign nationals who held external accounts with UK financial institutions could trade tax free from London. Until the mid l990s the UK even had legislation permitting the registration of exempt international companies on the model of Cayman and the Isle of Man. The people in charge understood that to try to tax the international businessman would only result in the money flows going elsewhere. Those who could not vote with their feet would vote with their money.

Centuries of running an empire taught the British business and accounting practices which, while diplomatically giving lip service to taxing everyone, in fact gives rank its privilege. The US learned this lesson much later and only from the early 1980s exempted foreign nationals not resident in the US from tax liability on earnings from capital invested in the USA. Being a much larger economy, the US was able within the eight years of the Reagan administration to overtake the UK for the number one spot of the worlds tax haven. Nevertheless the UK is clearly number one in Europe and has the advantage of a more civilized approach then the USA. You can expect the police in London to give you a fair warning. The US authorities like to make test cases.

Substantial tax benefits accrue to UK residents who are not UK domiciled. It is possible for a non-UK national who has no UK capital or income to live indefinitely within the UK and legally avoiding paying any UK tax. This has resulted in London having a larger number of expatriate millionaires then the rest of Europe's capitals combined.

/more info... http://www.lectlaw.com/filesh/bbg30.htm

[FarCenter]

21. I would have thought London was ahead of NY

For tax haven islands, don't forget Jersey Island, a Baliwick of the Queen in the English Channel.

[Scandalous]

33. The comparision made in that article is ridiculous!

It completely ignores the population of each country. Given the amount of foreign capital as stated in the article, the US has $16,500 of foreign investment per capita. That number skyrockets to $264,000 for Switzerland! And as for the Caymans... get ready for this... $20.9 million per capita!!!

Safe to say that if those countries are "minor league" compared to the US, then I guess the end-goal is to end up in the T-ball league :)

FYI, these are just quick calculations that I did. I got my population estimates from the CIA world fact book.

[defendandprotect]

26. Should happen . . . these secret accounts are a threat to democracy . ..!!!

[GeorgeGist]

27. Switzerland is long overdue ...

for a phuck you very much.

[agincourt]

30. I wish we could keep our financial criminals in line.

without bringing the hammer down on the Swiss.

[yurbud]

32. hearing that we are finally going after these bastards is some of the best news of the Obama admin

[Mr. Hyde]

35. Considering the bipartisan complicity in this matter, I'm surprised we're hearing a word about this.

It will be nice to see justice being served up equally and fairly for a change.