In its editorial today the New York Times demands that the US government pushes ahead with its battle to bring tax evaders to court. While the British and German governments plough on with their shabby deals with the Swiss government, the US has been pushing Swiss banks to reveal data about US criminals hiding behind Swiss banking secrecy laws, and although the banks are trying to find wriggle room, the NYT sees no room for compromise:
"Almost three years after UBS, Switzerland's biggest bank, paid a $780 million fine for helping Americans evade taxes and agreed to hand over the names of more than 4,500 American account holders, the Swiss banking industry refuses to exit the business of tax evasion. And the Swiss government still insists on protecting it from scrutiny. The United States should not compromise in pursuing the data it needs on American tax cheats."
Who, apart from criminal tax evaders and the bankers who profit from flogging banking secrecy, would disagree? This is time for governments of all democratic countries to rid the world of banking secrecy. The US government should press home its advantage. As the NYT rightly points out, the Swiss banks are totally vulnerable here, and if they persist in defending the indefensible the US government can take strong counter-meaures.
"There is no need for the United States to accept this sort of arrangement. If Switzerland stonewalls, the Justice Department can indict banks that benefit from tax evasion and seize their assets in the United States, moves that could put them out of business. At some point, the Swiss government will find that result a lot more costly than handing over information on American tax cheats. "
Read the full editorial here.
NB: Reposted from the Tax Justice Network blog with permission
I might add that I think the UK should follow exactly the same path instead of the path of polite accommodation pioneered by HMRC right now.
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This is an interesting issue and while I have no truck with tax haven abuses and support your campaign to see the UK/Swiss deal over turned by the EU, the case of Konrad Hummler and Switzerland’s late eldest bank Wegelin which is being prosecuted for tax evasion by the US seems to be more complex than that. Hummler is apparently a feisty character and appears to have fallen foul of the US partly because of objections to the extra territorial reach of US tax rules which can catch for US inheritance tax any citizen of any country who dies owning US securities. He felt requiring a bank to have knowledge of all its non US clients worldwide assets, just to avoid falling foul of this quasi imperial rule was too much bureaucracy. If that is all Wegelin are guilty of one would have to have a smidgeon of sympathy. It will be interesting to see what happens when/if the case comes to court when hopefully all the facts will emerge.
It is sickeningly hypocritical that the US prefers to settle banker criminality on a civil basis where the bank plays the game e.g. the alleged $25 billion robo-signing mortgage fraud deal this week with 5 big American banks and civil settlements with other Swiss banks for helping US citizens evade tax, from UBS downwards.
Make a few critical points about the extra territorial extent of imperial tax laws and they try and send you down. What price free speech?
Any thoughts on this Richard or are you just happy to see the Swiss getting a kicking?
Oh come on – the charge is assisting tax evasion, not minor issues
Please do not be an apologist for tax abuse
And are the US right to distrust all Swiss banks and bankers? Yes, of course they are. Swiss banks have systemically supported corruption