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Post by reknab on Jul 18, 2008 2:32:25 GMT 4
UBS AG will no longer provide offshore banking and securities services to U.S. residents through its bank branches, Mark Brunson, chief financial officer of its global-wealth-management business, told a Senate permanent subcommittee on investigations today.
The Zurich, Switzerland-based firm is being investigated as to whether its clients used offshore accounts to hide assets and avoid paying taxes.
The company will wind down its offshore business, won’t allow new accounts and will forbid advisers from Switzerland from coming to the United States to meet with American clients, Mr. Brunson said.
Additionally, UBS will work with the federal government to identify the names of U.S. clients who may have engaged in tax fraud, he said.
“UBS genuinely regrets any compliance failures that may have occurred,” Mr. Brunson said.
“We will take responsibility for them; we will not seek to minimize them,” he said. “We will take the actions necessary to see that this does not happen again.”
Mr. Brunson noted that client identities are generally protected from disclosure under Swiss law, but added that those protections don't apply when the disclosure of client names is requested in connection with a tax fraud investigation.
Is this a sign of things to come? Oh boy !
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Post by Sapphire Capital on Jul 18, 2008 3:19:20 GMT 4
sure, the way the US government handles things, its going to be the dumb and tell game. No one in his right mind will accept US residents and citizens in his banking circle when he does anything else than good old fashioned banking in the US alone, otherwise its to risky.
Its the old fashioned game of bullying, only that the bully will have to learn that after some effort and success, he is standing alone at the block.... we've been there with other powers and other situations....there is always a way out.
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Post by reknab on Jul 20, 2008 6:15:34 GMT 4
New Offshore Bank Limits for U.S. Clients, UBS Says...
Faced with a federal investigation into its private banking practices, the Swiss banking giant UBS said on Thursday that it would stop offering offshore banking services to clients in the United States.
Mark Branson, chief financial officer of the UBS global wealth management group, told a Senate subcommittee that the company would provide banking or securities services to United States residents only through companies licensed in this country and that it would help the federal government identify American citizens engaging in tax fraud.
On Wednesday, a Senate permanent subcommittee on investigations released a report saying that UBS's offshore practices helped American citizens hide an estimated $18 billion in 19,000 accounts from the Internal Revenue Service.
In his testimony, Mr. Branson apologized for any compliance failures that might have happened and said the decision to close its Switzerland-based cross-border business was intended to ensure that such failures did not happen again.
Clients in the United States will still be able to access UBS's services through wealth management units that are regulated by the Securities and Exchange Commission. But advisers based in Switzerland will not be allowed to come to the United States to meet with American clients.
UBS's decision came as a surprise even to Senator Carl Levin, Democrat of Michigan, the subcommittee chairman, who said in his opening statement that UBS operated "behind a wall of secrecy" that needed to be torn down.
"I thought we were ready for any possibility," Mr. Levin said after the hearing. "It turns out we weren't."
The committee also heard taped testimony from Heinrich Kieber, a former employee of LGT, a bank owned by the royal family of Liechtenstein. Mr. Kieber supplied details about LGT account holders to the I.R.S. and other countries.
The subcommittee's report said that both LGT and UBS helped Americans avoid taxes by setting up convoluted foreign-owned offshore accounts whose assets did not have to be reported to the I.R.S. That practice by LGT, UBS and other offshore companies costs the Treasury Department $100 billion annually in lost taxes, Mr. Levin said.
Both LGT and UBS have what are known as qualified intermediary agreements with the I.R.S., which were established in 2001 to allow the revenue service to collect taxes with the help of foreign banks. But those agreements do not mandate the reporting of accounts held by non-American citizens or companies, a loophole that Senator Norm Coleman, Republican of Minnesota and the ranking subcommittee member, said that LGT and UBS had exploited.
Douglas H. Shulman, the I.R.S. commissioner, testified that his agency was strengthening the qualified intermediary program. He asked Congress for more time to audit offshore accounts that might have been used for tax evasion.
But Mr. Levin and Mr. Coleman indicated that they would most likely seek legislative solutions.
The federal tax investigation initially focused on Bradley C. Birkenfeld, an American and a former top UBS executive, who pleaded guilty in June to a single fraud charge of helping an American citizen conceal $200 million in assets from the I.R.S.
In May, federal authorities detained Martin Liechti, a Swiss citizen and senior UBS official, in Miami in connection with the investigation. Mr. Liechti appeared before the subcommittee Thursday, but declined to testify, citing his Fifth Amendment rights.
Mr. Levin commended UBS for changing its business practices. "We can't reach all the banks," he said. "We have reached yours. That represents progress."
LGT declined a request to testify before the subcommittee, though a senior official from the company did meet with subcommittee staff members last Friday.
This week, the company sent a letter to the subcommittee refusing to testify, saying it had complied with its qualified intermediary agreement. The letter also said that company representatives would be severely limited in what they could say because of the principality's strict disclosure laws.
Mr. Kieber, who is in a witness protection program, is accused of breaking those laws.
With his face disguised on the videotape, Mr. Kieber told the subcommittee that LGT had used sophisticated methods to avoid detection by American tax authorities. LGT customers were advised to use only public phones to contact the bank, and the company mailed correspondence from nearby Austria or Switzerland, he said.
Michael Robinson, a spokesman for LGT, said in an e-mail statement to a reporter that the documents Mr. Kieber supplied dated "back to a time when the regulatory environment was completely different."
Shannon Marsh of Fort Lauderdale, Fla., and William Wu of Forest Hills in Queens, whose LGT accounts were examined in the subcommittee report, declined to answer the subcommittee's questions, invoking their Fifth Amendment rights. According to the subcommittee report, Mr. Marsh hid millions of dollars in four foundations in Liechtenstein, while LGT helped Mr. Wu orchestrate a fake sale of his house to his own offshore company.
Steven Greenfield of New York refused to appear after being subpoenaed. Peter S. Lowy of Beverly Hills, Calif., will testify before the committee next Friday.
Comment: Since most of us have dual citizenships, would it help if we use our other nationality (passport) to establish an offshore bank account. For example, a citizen of U.S. is also allowed by Israel to carry an Isreali passport.
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Post by Labuno on May 8, 2009 3:58:09 GMT 4
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