Rudolf Elmer at a press conference in Zurich 19 January
Zurich, Switzerland (GenevaLunch) – Rudolf Elmer, the former Bank Julius Baer employee who famously appeared with Julian Assange of WikiLeaks two days before his trial in Zurich for theft and threatening his former employer, has had one of his appeals turned down, his lawyer has told Swiss media in a press release.
He was convicted but given a suspended sentence 19 January for threats and theft, a lighter sentence than the prosecutor had demanded. He was then re-arrested within minutes on suspicion of breaking Switzerland’s banking secrecy laws, with which he was charged 22 January.
The appeal that was turned down 16 February was for the 19 January judgement, which did not cover banking secrecy.
He appealed, 27 January, his 22 January remand in custody for breaking bank secrecy laws by handing information to tax authorities, and this remains pending.
Elmer’s attorney, Ganden Tethong, noted in a press release 22 January that:
“The parties were informed of the court’s ruling this afternoon. In its decision, the court held that:
- there is probable cause to arrest Mr Elmer
- there is danger of collusion; in conclusion
- it granted remand.”
Switzerland’s law forbids bankers from handing data on client accounts to tax authorities unless done so at the client’s request.
Related stories in GenevaLunch:
Julius Baer nemesis reborn as Assange pal (17 January 2011)Rudolf Elmer arrested again over latest WikiLeaks handover (19 January 2011)
Theft and threats out of the way, Zurich turns to bank secrecy law violations to jail former banker
Rudolf Elmer at a press conference in Zurich 19 January
Zurich, Switzerland (GenevaLunch) - Rudolf Elmer was arrested again in Zurich Wednesday evening, shortly after being handed a suspended sentence. Elmer had a quick court hearing and sentencing Wednesday 19 January, for threatening his former employer, Bank Julius Baer, and for stealing data from the bank in 2002, which he then gave to WikiLeaks and others in 2008. He was widely reported to have been charged with breaking bank secrecy laws, not in fact the case.
Zurich police say he was taken into custody again late Wednesday on suspicion of breaking Swiss banking secrecy laws after he publicly handed two disks with data to WikiLeaks founder Julian Assange in London, last weekend, stating that they contained bank data. Elmer also said publicly, during his day in court Wednesday, that he had handed over to bank data to tax authorities and media groups.
NZZ reports that the cantonal prosecutor has until Friday evening to decide if Elmer will be charged.
Privacy protection is the umbrella for bank secrecy, professional secrecy laws
Swiss bank secrecy laws are part of a group of privacy protection that also cover data protection in the broader sense, limiting, for example, Google Street View’s right to film and sending to jail, as well as professional secrecy laws. The long-running nuclear proliferation Tinner case in Switzerland has involved questions about professional secrecy being violated.
Elmer might be charged under Article 47 of the civil code which requires bankers to protect the confidentiality of clients’ data. It also allows for a subsequent charge of violating professional secrecy:
Bern, Switzerland (GenevaLunch) – The Swiss Federal Council Wednesday 1 September adopted an ordinance, soon to be replaced by a law, on the procedures to be followed when another country asks for assistance in cases of suspected fiscal fraud. A key element in the text is that the Swiss government will not accept a demand for “administrative assistance” under double taxation treaties if the request is made based on stolen data. The federal tax service will make a preliminary review of the request, which must show “good faith”, the new ordinance dictates. It goes into effect 1 October 2010, but is not retroactive.
A second key element is that the requesting government must provide adequate information to allow Switzerland to identify the account holder and the party holding information about the account, in order to avoid what are called fishing expeditions. Tension rose in 2009 between France and Switzerland over what the Swiss labelled at the time a fishing expedition. France later dropped its request.
Germany and France have both received stolen data from Swiss banks, a cause of some political tension. The UBS case, where a special treaty was drawn up between the US and Switzerland to review data on 4,450 cases of suspected tax fraud, was not based on stolen data per se, but rather on information supplied by a former employee of the bank, to US authorities.
German local government confirms new stolen data offered, Swiss president confirms Germany bought first batch
Swiss politician might consider reconsidering Swiss banking secrecy, some hint
Bern, Switzerland (GenevaLunch) – The saga of data stolen from Swiss banks and offered to the German government continues, with new wrinkles to the story. A German newspaper will publish an article Saturday, reports Swiss television TSR, stating that a new batch of stolen data, with 2,000 client names, is being offered to a regional German government. The government of Bade-Wurtemberg has confirmed the information.
Meanwhile, Swiss President Doris Leuthard told reporters as she came out of a meeting that Switzerland will likely ask for a copy of the first batch of stolen data. Switzerland did the same with data stolen from a Geneva branch of British bank HSBC and sold to the French government. The data will allow Switzerland to see if requests for judicial assistance from France, and perhaps now from Germany, are based on information obtained from the stolen files. If this is the case, Switzerland will refuse to provide assistance because of the illegal source of the information.
Switzerland and Germany have confirmed this week that they are slowly, steadily continuing to negotiate a new bilateral double taxation agreement.
One of the results of this, according to Le Temps newspaper, is that the question of the viability of Swiss banking secrecy is no longer a taboo political issue.
Thieves to be prosecuted once identity known
Update 21 August Miami, Florida, USA (GenevaLunch) - A banker for NZB (Neue Zürcher Bank), Hansruedi Schumacher, and a Geneva and Zurich lawyer, Matthias Rickenbach, both Swiss, were indicted Thursday 20 August in Miami, Florida on charges of conspiring to defraud the US. The two are accused by the US of helping US residents to evade American taxes, including Jeffrey Chernick of New York and John McCarthy of Pasadena, California, two of four UBS clients who recently have been indicted for tax fraud after their names were given to the IRS in February 2009 by the bank, and who turned themselves in.
The two are accused, among other things, of telling “a New York businessman they paid an unnamed Swiss government official a $45,000 bribe for information on whether the businessman’s account would be revealed to US investigators,” Associated Press reports court documents as stating. AP also says the two are in Switzerland and it is not clear if they have US attorneys to represent them.
The New York Times says the new indictments indicate “that the American authorities are starting to pursue smaller players that may have helped Americans hide their money.”
UBS New York headquarters
Update 2 Florida, USA; Bern and Zurich, Switzerland (GenevaLunch) – The bell hasn’t yet quite tolled for anyone in the US court case where the IRS is asking for names of UBS bank clients. Judge Alan Gold in Miami late Friday 7 August, Swiss time, gave the two governments another week, until 12 August and at their request, to hammer out details of an out of court settlement.
Reactions were mixed, with the Financial Times reporting that “Friday’s setback caused confusion” for investors, arguing that the “failure” to reach an agreement will hurt UBS shares. Swiss media were more phlegmatic, viewing the delay as an acceptance that a resolution of several technical issues requires more time, which the judge has given.
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.
Washington, DC (GenevaLunch) – The US Justice Department, in a document obtained by Swiss wire service ATS, is reported to be insisting that it will not relax its stance on Swiss bank UBS. A US federal court in Miami 13 July will hear a civil case brought by the IRS tax authority against the Swiss bank. The IRS says UBS must hand over the names of owners of 52,000 bank accounts. UBS and the Swiss government say it cannot do so because the bank would be breaking Swiss banking secrecy and data protection laws, and that the demand by the IRS in any event runs counter to the existing US-Swiss treaty that covers demands for assistance in criminal cases.
Bern, Switzerland (GenevaLunch) – Switzerland and the United States “initialed” a revised double taxation agreement (DTA) in Washington, DC 18 June. According to the US government, “Official signing of the protocol is expected in the next few months.” A new agreement was necessary following the Swiss government’s decision 13 March to adopt the OECD’s (Organisation for Economic Co-operation and Development) Model Convention standard under which countries provide each other with tax assistance.
The decision followed pressure on Switzerland from other OECD member countries to ease its strict banking secrecy laws. The OECD has told Switzerland it must have 12 new bilateral tax agreements in place by the end of 2009 if it does not want to appear on a “gray list” of countries that are considered non-compliant.
Bern, Switzerland (GenevaLunch) – Switzerland announced this weekend that it has asked the US to drop a civil suit by the IRS tax authorities against Swiss bank UBS, as part of negotiations for a new tax treaty. The IRS is seeking information about 52,000 UBS bank accounts held by Americans. Swiss President Hans-Rudolph Merz and US Treasury Secretary Tim Geithner met over the weekend in advance of a first meeting to renegotiate the US-Swiss tax treaty. The meeting of the two sides takes place Tuesday 28 April.
Update 14:30 Bern, Switzerland (GenevaLunch) – Tuesday noon four countries joined the “gray” list of those willing to abide by OECD standards to exchange information on tax evasion and fraud, but who have not yet implemented the change: Costa Rica, Malaysia, Philippines and Uruguay. Switzerland was also named to this list 2 April.
Bern, Switzerland (GenevaLunch) - Switzerland has begun negotiating new bilateral tax treaties with two key partners, the United States and Japan, Swiss President Hans-Rudolf Merz told a press conference Wednesday 25 March. Talks with Japan are 75 percent completed, but discussions with the US will take longer, he noted.
Ultra-deepwater drillship Deepwater Discovery working off West Africa (photo: Transocean)
Updated 21:15 Geneva, Switzerland (TSR, Fre) – TSR carries a video report on 10 foreign companies that have decided to move their head offices to Switzerland to date in 2009. They include Transocean, the world’s largest offshore oil drilling company, which has moved from the Caribbean to Geneva.
Bern, Switzerland (GenevaLunch) – Relations between Switzerland and Germany, already tense over the issue of banking secrecy and German taxpayers, appear to be worsening despite Switzerland’s announcement last week that it would relax its strict interpretation of the country’s law covering secrecy and fiscal information exchanges.
Geneva, Switzerland (GenevaLunch) – One of three options for the future of Switzerland’s banking secrecy could be to link it to an indirect tax, Swiss President Hans-Rudolf Merz, who is also the country’s finance minister, told a press conference in Geneva Thursday afternoon, saying it is the option he favours.
Video: Senate subcommittee hearing, UBS testimony 4 March 2009
Washington, DC (GenevaLunch) – Mark Branson, chief financial officer for UBS’s wealth management business, told a Senate subcommittee in Washington Wednesday that the bank will not hand over more client information to the US government. His testimony was lambasted by Senator Carl Levin from Michigan, who chairs the subcommittee on investigations. Levin referred to “those cheap shenanigans. . . that rob honest US taxpayers” in his introduction to Branson’s testimony.
Switzerland (GenevaLunch) - When the US announced Thursday 19 February that it was filing a civil suit against Switzerland’s largest bank, UBS, it provoked a major debate in Switzerland, with harsh criticism of the bank, but also of the United States. Outside the country, moves against Switzerland’s banking secrecy appeared to build momentum over the weekend, starting with discussions to tighten global financial controls among the G20 (largest 19 economies plus the European Union) countries, meeting in Berlin.
