Swiss Roll Ball into Own Goal.
When you don’t have many claims to fame, you need to work hard at protecting the ones you do have.
The history of Swiss banks dates back to several centuries ago. The French kings were the first Swiss banks clients and they highly valued confidentiality and security. One of the first legal acts regulating the bank secrecy dates back to that epoch.
In 1713 The Grand Council of the Canton of Geneva passed banking regulations that imposed an obligation to keep a registry of their clients and their operations. Disclosing such information to any third parties without express permission of the City Council was strictly prohibited.
Owing to this long tradition bank secrecy requirements in Switzerland are the strictest in the world. The bank secrecy requirements apply to tax evasion – under Swiss Law the refusal to provide information about one’s property or income is not considered a crime.
A banker shall be held liable either criminally or managerially if he infringes the secrecy and discloses any confidential information about a client without his assent (excepting grave crime such as drugs and arms smuggling).
One of the largest Swiss Banks, UBS, was taken to court in Miami a couple of months ago, after refusing a demand by the U.S. Internal Revenue Service to disclose data on 52,000 American holders of secret Swiss bank accounts to U.S. tax authorities, which would breach Swiss bank secrecy.
It was a bitter battle, during which the Swiss accused the Americans of seeking to ‘provoke international conflict’. Whoa!
Unfortunately for UBS, they have 27,000 staff in the US and lost billions of dollars in the global financial crisis, requiring a bail out by the American government. Behind the scenes diplomats scurried anxiously around. The Swiss Defence Minister offered to take prisoners from Guantanamo Bay if the Americans would back off their bank (yes, really!) – finally Roman Polanski’s head was delivered on a golden platter to the US authorities, and the case was settled with a mild rebuke and a demand for $780 million dollars to be paid to the IRS. Oh, and the Swiss bank agreed to provide details of an paltry 4,450 account holders some time in 2010. Assuming they still held accounts then. Assuming they hadn’t fled to another Tax haven by that time.
In order to give their clients a head start in the race to hide their finances – UBS sent each of its 52,000 American clients, not just the 4,450 earmarked for disclosure, even those who had specifically requested ‘no mail’ from the bank, a registered letter firmly marked ‘UBS Switzerland’ warning them that their details might have to be handed over next year.
Needless to say, the US Inland Revenue which works closely with the US Postal department now has a complete list of all those Americans who received a registered letter marked ‘UBS Switzerland’……….
‘The hills are alive with the sound of Inland Revenue laughter’…….
-
1
October 20, 2009 at 11:48 -
Very entertaining (and informative) read Anna.
-
2
October 20, 2009 at 11:57 -
If the US postal service are anything like the Royal Mail, quite a few of those letters will have gone to the wrong recipients, been lost, etc.!
-
3
October 20, 2009 at 12:01 -
Having asked, I was once led to believe by a certain bank in a certain offshore state, that if my account details were ever demanded, I would be made aware before the details were released. Presumably giving me the required two minutes to close the account.
Not that I ever had much in it. I fast discovered that interest payments in France are so much better.
But I had to laugh about the registered letters.
-
4
October 20, 2009 at 12:50 -
The more cynical would be forgiven for thinking they were looking for more than just tax evaders. Who knows what accounts may be uncovered.
-
5
October 20, 2009 at 14:00 -
Er … oops!
-
6
October 20, 2009 at 14:07 -
So some people still have money to Berne, do they?
-
7
October 20, 2009 at 14:12 -
Capital pun Glo.
-
8
October 20, 2009 at 14:47 -
I might make another one if I can Lucerne up a bit.
-
9
October 20, 2009 at 14:52 -
I can berra that one. You should Quito now, before it drives you Caracas.
-
10
October 20, 2009 at 14:53 -
I beg your Baden?
-
11
October 20, 2009 at 15:03 -
I never promised you a Roseau garden.
-
12
October 20, 2009 at 15:07 -
Stop that right now – you’re just Beijing silly now – you don’t want to Mecca fool of yourself, do you?
-
13
October 20, 2009 at 15:09 -
Yes you’re right, off to watch my full Monte video now.
-
14
October 20, 2009 at 15:16 -
Puns are a bit like buses aren’t they? Kuwait for hours, then they all come at once.
-
15
October 20, 2009 at 15:19 -
I think I’v a letta get the better of me, the little Minsk
-
16
October 20, 2009 at 15:21 -
I’m only Havana laugh.
-
17
October 20, 2009 at 15:24 -
Yerevan a laugh?
-
18
October 20, 2009 at 15:25 -
I’m feeling a bit peckish – just off to make an Amman Tunis sarnie…
Back in a mo. Glo. -
19
October 20, 2009 at 15:30 -
(switches radio on and waddles round kitchen humming ‘Ouagadougou – doo, push pineapple, …)
-
20
October 20, 2009 at 15:31 -
Brussels sprouts and a nice Vienna roll for me.
Moscow, see ya.
-
21
October 20, 2009 at 15:36 -
Ta-Harare for now, Seoul.
-
22
October 20, 2009 at 16:08 -
Phuket, I’m off.
I’ll get me coat.
-
23
October 20, 2009 at 16:28 -
Baht. Humbug.
Late entry, Sabot, but Turin with a winner there! -
24
October 20, 2009 at 17:12 -
Too obvious really, Glo. But some idiot was bound to say it.
-
25
October 20, 2009 at 18:17 -
Phuk… oops.
-
26
October 20, 2009 at 19:10 -
OT but side-wise related [sending “dangerous” letters]: long time ago [everything seems to be long time ago at my age
-
27
October 21, 2009 at 10:31 -
It was a fascinating little episode which arrived as tax havens were coming under a barrage of international condemnation.
Not that Brown has ever translated his words into action, but still.
-
28
October 24, 2009 at 13:33 -
I take your information very seriously. Since it’s heavily discussed in Swiss forums, a reliable source would be nice. Please let us know about!
Reply from Anna:Are Reuters and The New York Times serious enough for you?
http://www.reuters.com/article/newsOne/idUSTRE58H3FZ20090918?pageNumber=1&virtualBrandChannel=11604
http://www.nytimes.com/reuters/2009/10/18/business/business-us-ubs-tax.html?_r=1&dbk
-
29
October 24, 2009 at 18:27 -
Thanks, Anna, for your info! I forwarded your links to the English Forum, a place where English speaking ex-pats in Switzerland meet online. See the whole thread here: http://www.englishforum.ch/finance-banking-taxation/65012-ubs-letters-52-000-american-clients.html#post584201
{ 29 comments }