Banking privacy battle rages
(24 February 2009 – Europe) The battle over banking privacy continues, with UBS forced to pay A$1.2 billion to the US Government for its part in US clients’ tax fraud and facing further demands to hand over client information.
While UBS has been fined over its role, the battle for banking privacy continues.
UBS was forced to reveal to US authorities account details for about 250 to 300 customers targeted by the investigation, according to Swiss President and Finance Minister Hans-Rudolf Merz.
The bank has, however, refused a US Government demand to provide information on 52,000 US clients, requested in a lawsuit filed as part of a tax fraud investigation.
President Merz said that while banking secrecy remains intact, it doesn't protect tax fraudsters.
UBS is challenging the summons for the 52,000 clients based on Swiss financial privacy laws and principles of international comity that require US courts to take into account foreign laws.
Meanwhile, Luxemburg, which also has banking privacy laws, has also weighed in on the debate.
According to Luxembourg's deputy Prime Minister, Jean Asselborn, banking secrecy needs to be redefined, but abolishing it abruptly is not in Europe's interest.
Asselborn warned that it would not help the European Union to abolish banking secrecy suddenly, as money could flow out of Europe. Close to 150,000 workers come from across Europe to work in Luxembourg’s banking industry.
UBS was forced to reveal to US authorities account details for about 250 to 300 customers targeted by the investigation, according to Swiss President and Finance Minister Hans-Rudolf Merz.
The bank has, however, refused a US Government demand to provide information on 52,000 US clients, requested in a lawsuit filed as part of a tax fraud investigation.
President Merz said that while banking secrecy remains intact, it doesn't protect tax fraudsters.
UBS is challenging the summons for the 52,000 clients based on Swiss financial privacy laws and principles of international comity that require US courts to take into account foreign laws.
Meanwhile, Luxemburg, which also has banking privacy laws, has also weighed in on the debate.
According to Luxembourg's deputy Prime Minister, Jean Asselborn, banking secrecy needs to be redefined, but abolishing it abruptly is not in Europe's interest.
Asselborn warned that it would not help the European Union to abolish banking secrecy suddenly, as money could flow out of Europe. Close to 150,000 workers come from across Europe to work in Luxembourg’s banking industry.
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