Poor little Switzerland
Monday, June 29, 2009
"You mean old U.S. and U.K. bullies, quit picking on us!"
That's essentially what one Swiss banker is saying about efforts by the United States, the United Kingdom and other countries to close down, or at least more tightly control, Swiss and other European countries' uber-private financial operations.
Yves Mirabaud, a managing partner at the Swiss private bank that bears his name, told the Financial Times that such efforts are "more than simply fighting against tax havens. Switzerland is a small country. It is not powerful."
It depends, Mr. Mirabaud, on just how you define power.
The Swiss banker also portrayed the global tax haven issue as an "economic war" and shot back at the tax practices of those who accuse Switzerland and other Alpine nations of tax evasion.
"There is nothing easier than doing tax evasion in the U.S. Look at Delaware companies or trusts in the Channel Islands," said Mirabaud.
Now about those UBS accounts: But Mirabaud did at least acknowledge that UBS had "behaved poorly" and had not "helped the Swiss financial centre."
UBS, Switzerland's largest bank, came under fire for helping wealthy Americans hide nearly $20 billion from the IRS. The financial institution was back in the news last week when the first UBS client named in connection with U.S. tax evasion charges pleaded guilty.
Steven Michael Rubinstein, a Boca Raton accountant, admitted to filing a false 2004 tax return by failing to disclose the existence of a Swiss bank account maintained by UBS.
According to the court documents, Rubinstein was the beneficial owner of the account and he failed to report any income earned on the account.
The Department of Justice announcement of the plea noted that:
From 2001 through 2008, Rubinstein communicated with bankers at UBS via email, telephone and in person about the purchase and sale of securities worth more than 4.5 million Swiss Francs, the conversion of investments from U.S. dollars to British Pounds, the deposit and transfer of funds into and out of the UBS Swiss accounts, and the repatriation of approximately $7 million into the United States to purchase property and build his personal residence in Boca Raton.
Additionally, Rubinstein deposited and sold more than $2 million in South African Krugerrands through his UBS accounts.
Rubinstein was released on $12 million bond. He will be sentenced on Sept. 30.
Legal wrangling continues: Rubinstein's name was one of 285 that UBS turned over to federal prosecutors In February. That move was part of a deferred prosecution agreement the bank reached with U.S. prosecutors. It also forked over $780 million.
Despite the agreement and the first plea resulting from it, culture clashes and concerns over customer bank privacy have led to the inevitable lawsuits.
Last week, reports surfaced that the U.S. might drop its lawsuit to get the names of around 52,000 more UBS clients. The Department of Justice denied any such possibility.
Swiss officials, however, say that UBS and American authorities are trying to reach a settlement.
Who will win this tax haven, tax privacy battle? I suppose it will be which side has the biggest guns in the Mirabaud-described economic war.
I'm kind of chuckling... I used to have a UBS account, but closed it in 2002 -- I'm no richie rich, though. I used to live there, and I kept the account after I came back home. I finally closed it, because by the end it had like 30 francs in it. The teller in this tiny village was trying to get me to keep the account open, but I told him I wanted to by 30 francs of chocolate. He didn't laugh.
Anyhow, I wonder if the government would have come after me for the few Rappen in interest I earned every year?
Posted by: Cindy | Tuesday, June 30, 2009 at 03:21 PM
if the Swiss were a nuclear threat, the US would stop bullying them. The US has a habit of bullying defenseless countries, regardless of the reason. But Not Iran. Not North Korea.
Posted by: tim vanovickoyo | Monday, June 29, 2009 at 08:42 AM