In February, UBS admitted that it had sent Swiss bankers to the US to assist high net worth individuals to set up secret Swiss accounts to evade US income taxes. UBS paid a fine of over $700 million and turned over 250 names.
Now the IRS wants UBS to disclose the other 50,000 plus names. Enter stage left, the Swiss government which has told UBS it is against Swiss secrecy laws to disclose the names. Check out this short video of how UBS is between a rock and a hard place. You can get some details and color from this Reuters article.
So, the Swiss government make prevent UBS from disclosing the names and the US government could actually prevent UBS from doing business in the US. How did UBS get into this situation? UBS put making money as a higher priority than doing the right thing. Leaders always put doing the right thing first. When you put money ahead of doing the right thing, very bad results occur and sometimes these results are devastating. See Arthur Andersen.
Cheers, Mike
Posts
The UBS's assistance of tax evaders has nothing to do with the "right" thing. It's perfectly fair play (and has been for many, many years) under Swiss law. By a similar token, foreigners can invest in the US to evade taxes on their interest. It gets a bad rap from TV and movies, but it's protected by law.
ReplyDeleteAlso, it's UBS and the Swiss gov't Vs. the IRS. In fact, the Swiss government has threatened to keep the bank from divulging its data even if it wants to.
Cf. http://www.newsy.com/videos/timeout_of_the_titans
Daniel, I agree with your comments. I thought the issue is that UBS 'recruited' US citizens on US soil to use the Swiss bank secrecy laws to evade taxes and that is the issue. I agree with you that if a US citizen contacted UBS on his/her own to open a Swiss account, the issue would not have been with UBS and the Swiss govt.
ReplyDeleteAlso, how much impact on this matter do you think the fact that the US helped Switzerland in the fall with a quiet, but large currency swap?
Cheers