The U.S., Switzerland, and UBS AG settled a contentious eight-month legal battle over Swiss banking secrecy rules and U.S. tax evasion. In the deal, the IRS will get access to up to 4,450 UBS Swiss bank accounts in which Americans at one point stowed $18 billion, and Switzerland doesn’t have to change its laws. U.S. clients of UBS face up to $3.7 billion in back taxes and penalties, according to Swiss newspapers. (Christian Science Monitor)
What the commentators said
“This is the beginning of the end of secret banking practiced in the open,” said Alex Salkever in Daily Finance. The UBS deal means it’s “open season” on secrecy at all Swiss banks, and it’s about time. Much of Switzerland’s wealth is derived from helping people “hide money and rip off their own governments” of tax revenue. I say, “good riddance to the Swiss parasites.”
Actually, the “chief attraction” of this deal to the Swiss is that it lets them “claim that bank secrecy is upheld,” said Margaret Doyle in Reuters, although unconvinced wealthy Swiss banking clients might move their money to new tax havens like Singapore. UBS, for its part, avoids a potentially ruinous fine—or any fine. And the U.S. gets tax revenue, so everyone can “claim a sort of victory.”
No, the deal is “a shame for all parties,” said Galileo Global Advisors CEO Georges Ugeux in The Huffington Post. UBS did abet tax fraud, but it settled that with a $780 million IRS fine earlier this year; now it’s just betraying its clients. The U.S. stepped on international law and Swiss sovereignty by reaching its “tax arm” abroad. And Switzerland caved. Watch: This will have “major ramifications.”
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