Swiss Block U.S. From UBS Files

Switzerland Won't Allow Bank to Transfer Data to U.S. for Tax Evasion Probe

(AP)  Switzerland's government said Wednesday it would forbid the Swiss bank UBS AG from complying with any court-ordered transfer of data on tens of thousands of American clients to the U.S. government, and would consider seizing documents to prevent that.

The statement was the strongest yet by Swiss authorities locked in a battle with the U.S. Justice Department over the identities of more than 50,000 American clients at UBS.

The case in the federal district court in Miami has become a focal point of Washington's efforts to crack down on tax evasion and the foreign banks that help wealthy Americans send money overseas. But UBS and the Swiss government say handing over the names would violate Swiss law and subject bank employees to criminal prosecution in Switzerland.

"Swiss law prohibits UBS from complying with a possible order by the court in Miami to hand over the client information," the Swiss Justice Ministry said in a statement, describing its latest filing with the Miami court.

It said the bank would not be in a position to comply, anyhow, since "all the necessary measures should be taken to prevent UBS from handing over the information on the 52,000 account holders demanded in the U.S. civil proceeding."

Ministry spokesman Folco Galli told The Associated Press the government decided last month that it would even seize the documents from UBS to prevent the transfer.

Last month, the U.S. Justice Department said UBS "systematically and deliberately" violated U.S. law by dispatching private bankers to recruit wealthy Americans interested in evading taxes. It urged U.S. District Judge Alan S. Gold to hold UBS accountable for conducting years of illegal business on U.S. soil - business it claimed had earned the bank more than $100 million in fees but cost the U.S. hundreds of millions of dollars in unpaid taxes.

Gold has set a July 13 hearing on whether to enforce what are known as "John Doe summonses" used by the Internal Revenue Service to seek information about U.S. taxpayers.

Swiss President Hans-Rudolf Merz has referred to the possibility of an out-of-court settlement, but U.S. authorities have pressed on with the case, threatening to further strain U.S.-Swiss relations.

UBS previously reached a deferred prosecution agreement with the Justice Department in which it agreed to disclose the identities of up to 300 U.S. clients and to pay $780 million to the U.S. government. In that deal, UBS admitted regularly violating U.S. law through its client recruitment methods, use of sham offshore entities and filing of false paperwork.

Nicolas Michellod, a senior analyst with Celent, a Boston-based financial research and consulting firm, said the U.S. and Switzerland were using legal agreements to try and gain the upper hand when they negotiate a settlement. The case, however, is only about money, he said.

"As UBS has already admitted its fault, there can be only one solution," Michellod said. "The Swiss bank will have to pay a fine or compensation of an amount corresponding to taxes that are still due to the U.S. government."

The Swiss government's extraordinary step is not without precedent. In the 1980s, it confiscated business files linked to commodities trader Marc Rich to ensure that they weren't passed on to the United States.

Rich fled from the United States to Switzerland in 1983 after he was indicted by a U.S. federal grand jury on more than 50 counts of fraud, racketeering, trading with Iran during the U.S. Embassy hostage crisis and evading more than US$48 million in income taxes - crimes that could have imprisoned him for more than 300 years.

He was controversially pardoned in 2001 by Bill Clinton just hours before he left office as U.S. president.

[pozjetsfan]

Hillarious!

So now the US decides, in it's infinite wisdon, to try to access the Swiss bank system. And they made Miami of all places the focal point. This is your brain. This is your brain in Miami. Any questions? Yeah. What are YOU on? If I had millions of dollars I can assure I would not stick in Bank of America in fact, I have two words for BOA.....Merril Lynch

[excoachken]

Swine5: The post office and Ford do not knowingly participate in crime, Switzerland, Leichtenstein, Andorra, and the Grand Cayman Islands do. Making an automobile is different than providing the driver (hidden paper trail) as these bogus outfits do. Are you not bothered by the fact that Nazis were allowed to continue to make their families rich (using stolen property of victims and other profits hidden in Swiss banks)long after the Third Reich fell? Aren't you slightly uncomfortable, knowing that the street gangs in your city are indirectly financed by such a system? Does our huge national debt belong to our children, or in part to the wealthy American CEO's whose hidden offshore accounts are of staggering dimensions? Sorry to interrupt your Kool Aid break, but get a grip on reality.

[GiveMeFreedom]

Sorry but you are in left field on this one and Swin5 (nice try at swine though to be deceitful) is correct. The Swiss are just protecting their laws.

You need to punish the law breakers. You may know them - they are the people not reporting their income from these accounts. You must be a democrat as you are blaming the Swiss when you should be blaming the individual, but of course as a democrat it is never the individuals fault is it?

[excoachken]

Now that Texass Ed had approved hiding money from the IRS so that the rest of us can pay his "share" of what it costs to run this country, we have been given a demo of classic Neo-Conman rationalization for robbing from a many (taxpayers) to benefit the greedy, good old boys on the inside.

[swin5]

Get off the Swiss's back. They know how to run a bank. Keep the government out of the business of the people and their money. This is Swiss policy. In Switzerland you don't get a form from the bank to file with your income tax, with a similar form being sent to the government to check up on you. The bank merely deducts an amount from all accounts and sends one check to the government on income tax day. The government never knows who has money in the bank or how much. Oh how I wish our government would stay out of our business the same way. So some people deposit money from criminal activity in Swiss banks. So what? Is the post office at fault if someone mails illegal drugs through the system? Is the phone company responsible if someone arranges a drug deal on the phone? Is Ford Motor Company responsible if you use one of their cars to rob a bank? Give me a break. There's a reason why the whole world prefers to deal with Swiss banks and not American or Japanese banks. The Swiss doctrine of neutrality dictates that their government will not concern itself with investigating the history of any funds deposited in their banks. This ironclad guarantee of safety and privacy is what all banking throughout the world should offer. Look at it another way - would you want a foreign country to be able to demand and get your banking records from an American bank? In fact, do you trust your own government to be able to access your banking records? I don't.

[xmissile]

Holder should send in the feds and storm all UBS buildings. Honestly, I'm expecting more from this administration and haven't seen the "change" that I believe was promised. The overwhelming majority of Americans are struggling but still manage to pay their taxes, and I think that the public truly believes there are two systems of justice. Obama should go after this one.

[excoachken]

Something is rotten in the state of Switzerland, and it ain't just the cheese. They are hiding drug laundered money, tax evasion funds and stolen property. I hope BO smacks them around.

[ludvig1-2009]

Launch a missle in the direction of Switzerland.

[GiveMeFreedom]

So it is now Switzerland's fault that dishonest people hide their income? So if you own a bank in the U.S. and the Ghana government shows up with a court order to start filing information returns in Ghana what would you say?

[whitemale08]

We said the same thing to President Hugo Chavez of Venezuela and Garcia Perez of Peru when the IMF/World Parasites crashed their economies and rich Latinos sent their looted fortunes to Miami.

As I said before from Lyndon Larouche, these banks make up the British Empire of the Anglo-Dutch Financial and Monetary System otherwise known as the Anglo-American dual power in Wall Street/City of London.

It's an empire folks that's crumbling and they want to bail it out on the backs of the people through MASSIVE MASSIVE AUSTERITY under the umbrella of the Global Warming scam.

[wogerwabbit]

So, we have 52,000 rich mo-fo's hiding their money to avoid taxes. I bet that would be a real interesting list to see

[GiveMeFreedom]

I for one would love to see the party affiliation of each of these accounts too.

[HolyVoice]

"Swiss law prohibits UBS from complying with a possible order by the court in Miami to hand over the client information," the Swiss Justice Ministry said in a statement, describing its latest filing with the Miami court. It said the bank would not be in a position to comply, anyhow, since "all the necessary measures should be taken to prevent UBS from handing over the information on the 52,000 account holders demanded in the U.S. civil proceeding."

This is economic terrorism by the Swiss government. The Swiss claim to be neutral, but that is really just a prop so they can break the laws of other countries. They did something similar with Nazi Germany during WWII, hording gold and other valuables that were stolen and then deposited into Swiss accounts.

The Swiss government should be persecuted at the Hague.