Geneva - Swiss banks are not allowed to transfer client
information to United States authorities, the government in Bern said
in a statement on Wednesday.
Switzerland filed its position Tuesday with a court in Miami,
Florida, in response to US authorities stating last month that
troubled banking giant UBS would not have to expect a criminal
proceeding if it handed over the information.
'In a brief response, Switzerland makes it perfectly clear that
Swiss law prohibits UBS from complying with a possible order by the
court in Miami to hand over the client information,' the government
statement said.
'UBS will by no means be in a position to comply with such an
order ... (and) all the necessary measures should be taken to prevent
UBS from handing over the information on the 52,000 account holders
demanded in the US civil proceeding,' the statement read.
UBS, finding itself stuck between the proverbial rock and a hard
place, has been engaged for a year in legal proceedings in the US in
relation to illegal activities its employees conducted there which
aided tax fraud.
The bank handed over information on 250 clients in February,
saying they had committed fraud, a crime which is not covered by
Swiss banking confidentiality laws. Tax evasion allegations, on the
other hand, do not entitle the lifting of the secrecy rules.
UBS also agreed to pay a fine of 780 million dollars.
The US authorities, however, continue to demand information on
52,000 clients. The Swiss say that as Washington has no proof of any
wrongdoing, or the names of the account holders, releasing the data
would violate banking secrecy laws.
Switzerland is in the process of relaxing its banking privacy
regulations in regards to foreign governments by rewriting double
taxation agreements with numerous capitals, including Washington.
Bern has said the new deals would still prohibit 'fishing
expeditions,' or times when information is demanded without solid
information against a specific client.
Swiss ministers have been trying to connect the double taxation
deals to the case against UBS, hoping to end the litigation in return
for long-term compliance with Organization for Economic Cooperation
and Development tax fraud regulations.
Swiss Economics Minister Doris Leuthard, on a visit to the US,
called for a settlement to the UBS case, saying she did not want a
drawn-out court case.
The Swiss government holds a minority stake in UBS after a bailout
last year.
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