Update 27 July 11:15, Geneva, Switzerland (GenevaLunch) – US authorities may be taking a new approach to going after the names of US-based clients of Swiss bank UBS. They are reportedly asking for the names of clients its advisors saw in the US. Reuters carries a lengthy article that states this, citing Swiss newsweekly Sonntagszeitung.
The move, if confirmed, may be a compromise in the legal dispute involving UBS and the US tax authority IRS, which wants the bank to divulge details on 52,000 of its US clients. Reuters reports that 60 UBS client advisors visited the US on average three times a year, for three weeks each visit, and saw four clients a day. John DiCicco, acting assistant attorney general in the tax division of the US Justice department, in March 2008 testified to a senate subcommittee investigating the case that “An internal UBS memorandum filed with the court demonstrates that, in 2004 alone, UBS bankers traveled to the United States where they held approximately 3,800 separate meetings with US clients to discuss their clients’ Swiss accounts. (Ed. note: the Sonntagszeitung article speculates that UBS hopes that the US Dept. of Justice may acccept the names of clients visited by UBS client officials as a way to avoid violating Swiss law by having to hand over all client data demanded by the IRS).
The number of account holders has been an issue since the case began, with the US putting forth the number of 52,000 US citizens evading taxes through UBS accounts as an educated guess.
DiCicco, using provocative language, made the announcement in February 2009 that the Department of Justice was seeking 52,000 client names from the bank, a day after the DOJ and UBS appeared to have reached an agreement.
The DOJ statement sparked the diplomatic and legal standoff between the two countries, moving the issue from a banking one into a diplomatic tiff over the bilateral tax treaty.
The Swiss government has told the Miami court that has held hearings that divulging the names of clients would violate Swiss law. The US has threatened to close down UBS’s operations in the US unless these are provided. A trial, following the hearings, was scheduled to start in mid-July but has been delayed until 3 August by presiding US federal judge Alan Gold. Swiss foreign minister Micheline Calmy-Rey and her US counterpart Hillary Clinton are set to meet 31 July. The judge has scheduled a status call for 29 July between lawyers of both sides.
Observers speculate that if there is a further delay in the proceedings, this would be a logical time to announce it.
Zurich lawyer Andreas Rueed, who represents eight US UBS clients, has said he will seek damages from the Swiss government if his clients’ names are divulged in violation of Swiss banking secrecy laws, Zurich newspaper Sonntag (Ger) reported 25 July. Ed. note: (The article also mentions that Swiss taxpayers may have to foot the bill for this.)
News story, GenevaLunch, 26 July 2009.
Filed under: Business
Tags: Alan Gold, banking secrecy, client advisors, client visits, Hilary Clinton, IRS, Miami, Micheline Calmy-Rey, Society, Sonntag, Sonntagszeitung, UBS, World news, Zurich
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2 Responses to “US may target 10,000 client visits by UBS bank advisors”
July 27th, 2009 at 2:12 pm
The US should back off on his embarrassing witch hunt. Soon the EU (high tax) countries will “catch” one of our”investment bankers” that went to Europe and solicited wealthy clients to put their money in our “secret” accounts. Our “investment bankers” convinced the wealthy clients to bring their money to the US because non resident aliens pay no taxes on gains in the US. Goldman Sachs, Morgan Stanley, etc are violators of this deceit. Lehman Bros was allowed to fail to cover up this solicitation fact. These Investment houses knew what UBS was doing. In fact, UBS was “copying” what our Investment Banks were doing. (Soliciting wealthy clients for our banks). The EU countries don’t have the surveillance that we do. That is why UBS got caught before Lehman Bros IE’s got caught. Do you think that UBS is the only violater of these solicitations? These big Investment Banks don’t work in isolation. They belong to a “good ole boys” club. they knew what each other was doing.
July 30th, 2009 at 9:07 pm
Apart from the numbers, what is the practical difference between UBS giving the names of 52,000 American accountholders, or giving the names of 10,000 Americans visited by UBS bankers? Both avenues will lead to audits and investigations of possible tax fraud.