Swiss to Stop UBS Handing Over Data in U.S. Tax Row
July 8th, 2009Via: Reuters:
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.
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 case, which comes amid a global fight against tax cheats supported by the U.S. administration, has damaged the UBS brand and could result in an expensive settlement for the bank at a time when the bank needs to focus on restructuring.
“Switzerland 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,” the Swiss government said in a response to U.S. authorities filed in Miami on Tuesday.
The tax litigation is also crucial for the future of the multi-billion dollar wealth management industry and is pushing several offshore banks to force clients to come clean.
A court hearing that will lead to a ruling on the UBS data issue is due to start on July 13. Washington has accused UBS of hiding nearly $15 billion in assets in secret accounts.
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.
