The Swiss government has called the Justice Department’s bluff in the fiercely fought UBS AG tax evasion case.
After the DOJ’s Tax Division took a club to the Swiss in a ferocious brief filed June 30 in Miami federal court, the Alpine tax haven said today it would forbid UBS from complying with any U.S. court order to reveal the names of 52,000 Americans suspected of using hiding assets from the IRS in accounts at the Swiss bank.
Even more wild: The Swiss government said it would consider seizing UBS documents to prevent the release of the names. Read the Associated Press story here.
There’s no telling what will happen if U.S. District Judge Alan Gold after a hearing in Miami on Monday rules that UBS must hand over the names. If Switzerland refuses to let the bank comply, it could be hit with a fine. How much, who knows. But Reuters looks at UBS’s financials and says the bank could probably afford to pay as much as $5.5 billion. Read the Reuters story here.
The Swiss are absolutely livid that the U.S. might destroy its precious bank secrecy rules, which for decades have allowed the world’s despots, potentates, oligarchs and ordinary tax cheats to launder stolen billions or otherwise hide assets. In really egregious cases, like the late Nigerian military dictator Sani Abacha, the Swiss will cooperate with investigators.
But opening the door as wide as the U.S. is demanding in the UBS case would destroy Switzerland’s business as a tax haven. And it would also make Swiss cities like Geneva a lot less amusing to visit: You’d see lot fewer jewel-bedecked Russian women teetering in high heels and tight jeans down the street next to fully draped Saudi women, who reveal only their eyes and their Fendi hand bags.
