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UBS settlement leaves Switzerland scarred
UBS, Switzerland and the United States can all claim a sort of victory from the settlement on Wednesday of their tax dispute.
UBS gets to avoid a fine that — according to the Swiss justice minister — would have threatened its existence. The Americans get the details of some 4,450 accounts that they say have held up to $18 billion, on which fat taxes may be payable. And the Swiss get to draw a line under a threat to their fundamental banking secrecy.
Even so, there will be many who want to keep their financial affairs private who will look for other homes for their cash.
The basics of the deal are as follows. The U.S. will drop its “John Doe” summons that looked for the names of as many as 52,000 Americans with accounts at UBS. This had prompted the Swiss to threaten that they would seize UBS’s data rather than accede to what they saw as a fishing expedition that they said would break Swiss law.
The Americans now say they were never looking for so many accounts, which would include many law-abiding citizens.
Instead, the Swiss will hand over details of 4,450 (the Americans say it could be more than 5,000) accounts of Americans at UBS. The bank, which is the world’s second-largest wealth manager, will write to affected account-holders urging them to take part in an American tax amnesty, if appropriate.
The Americans gain twice over. First, the affected account-holders will, unless they are stupid, cough up any outstanding tax before the amnesty expires on Sept 23. Anyone with accounts at other foreign banks is also likely to put their affairs in order before Uncle Sam forces them to. Moreover, Americans will in future will careful to comply with U.S. tax law given the reach of the U.S. justice department.
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The Wall
“For the Swiss, the chief attraction of this deal is that it allows them to claim that bank secrecy is upheld.”
Is that your words or their’s? Because if theirs, they are equating secrecy with tax evasion. Or with laundering. Either of which makes UBS a near criminal organization.
US non-banks are proven to be de facto mafia. UBS now proven to be de facto preferred bank for the tax evaders. Both must be thoroughly purged from existence.