After months of negotiation it looks like UBS, the largest Swiss bank, has finally agreed with the Federal government to give up the names of over 52,000 Americans who are suspect of using their accounts to illegally avoid paying their taxes.
According to Bloomberg.com, “UBS agreed to an unprecedented breach of Swiss secrecy laws by giving the Internal Revenue Service data on more than 250 accounts. Switzerland, which supports UBS in the case, said the U.S. push for data on 52,000 other accounts is a threat to its sovereignty and would force the bank to violate Swiss criminal laws protecting bank secrecy.
“Over the last week or so, there have been high-level officials from the two governments meeting, trying to narrow the issues and bring about a resolution,” Stuart Gibson, a Justice Department senior litigation counsel, told U.S. District Judge Alan Gold today at a hearing.
UBS attorney Eugene Stearns said the bank learned on July 11 about discussions between the Swiss and U.S. governments.
“We are anxious for the governments of these two democracies to resolve these issues,” said Stearns. “It’s a minefield trying to resolve these issues.”
Lynnley Browning of the New York Times also weighed in on the latest developments noting that “the dispute between UBS and the United States has escalated into a diplomatic drama and has threatened to pierce the veil of Swiss financial secrecy. UBS and the Swiss government have said they will not disclose client names, even if ordered by a judge, because doing so would violate Swiss laws governing financial secrecy and subject UBS executives to prosecution in Switzerland.”
In February, the Internal Revenue Service, backed by the Justice Department, sued UBS, the world’s largest private bank and a pillar of the Swiss economy, to force it to disclose the names of 52,000 wealthy American clients suspected of tax evasion through UBS’s offshore private banking division.