Alp? Check.
Chocolate? Check.
Banking secrecy? Not so much.
The culture of Switzerland may be changing. At the forefront of the change may be its uber-secret banking laws. Switzerland is being forced to re-examine the way it does business in response to pressure from a number of countries, including the US, the UK and Germany.
At the top of the list is disgraced banking giant UBS. UBS has been in a the news a lot lately in response to the revelations over the past two years that it has been helping rich foreign clients hide assets from their home countries.
Now, add lawsuits to the list of headaches at UBS: the once powerful bank has been sued this week by an anonymous group of wealthy Americans in an effort to stop the bank from revealing their identities.
Ahh, rich folks, I love it. They’re so above the law that they’ll use the law to prevent the law from being enforced.
The trouble stems from an settlement that the bank reached with the US Justice Department. As part of that settlement, UBS agreed to pay a hefty fine and release an as yet undisclosed list of client names to the feds. The list of US client names held by UBS is thought to be upwards of 50,000, though reportedly, only about 250 were part of the settlement. Those clients have allegedly committed tax fraud (and potential securities fraud) by not reporting assets and income hidden in Swiss banks. In truth, the question of whether or not the activity is illegal is barely a question at all: execs at the top of UBS have admitted to assisting very wealthy US clients in hiding assets for the primary purpose of evading taxation.
Nonetheless, about a dozen US clients of UBS feel that it’s their right to break US laws so long as Switzerland says it’s okay. So, the US clients have now sued in Swiss court, accusing UBS and Switzerland’s financial regulator, the Swiss Financial Market Supervisory Authority, or Finma, of violating Swiss bank secrecy laws. Under Swiss law, disclosing client names is a criminal offense.
(Note to US clients: under US law, lying about your assets is also a criminal offense. To-may-to, to-mah-to?)
The lawsuit has been filed on behalf of the US scofflaws clients by Andreas Rued of Rüd Winkler Partner.
So our government can require a entity to violate their own countries laws in furtherance of our laws? I have no problem with understanding that the folks involved are breaking our laws – but what we are doing is requiring someone to break a law in order to enforce another one. Sorry, doesn’t make a whole lot of sense to me – and even when we get the names all they have to do is talk the president into nominating them to a cabinet position and VIOLA! What appears to be criminal is now an “honest mistake”.
Skip
UBS is being sued in the US, under US law.
If the bank thinks there is a conflict between US and Swiss law, it can tailor its operations accordingly or it doesn’t have to operate in the US. It has plenty of lawyers to help them figure that one out. Every multi-national enterprise deals with that every day.
On the other hand, if it operates in the US, it needs to obey the law. Instead it chose to break the law and help others do the same.