From the Financial Times:
The Miami judge presiding over a crucial court hearing next Monday has called on the US authorities to specify how far they would go to force the Swiss bank to comply, should the court rule in their favour....
How's this grab ya? Pull the charter of their Utah industrial bank and cancel their U.S. securities licenses. For starters. Then start playing hardball. Why? Here's the official Swiss government position, from the Times of London:
Switzerland threatened to seize the names of 52,000 Americans from UBS rather than allow the Swiss bank to hand over the data to the US tax authorities.
UBS faces a court hearing in Miami on Monday, where it is being sued by the Inland Revenue Service (IRS)
The IRS, which suspects the Swiss bank of helping wealthy Americans to hide almost $15 billion so they could avoid paying tax on the money, wants UBS to give it the names of about 52,000 clients with Swiss bank accounts.
UBS claimed that revealing its clients’ identities would force it to break strict Swiss banking secrecy laws.
The Swiss Justice Ministry warned today that it would take control of the information rather than allow UBS to give it to the IRS.
"Switzerland will use its legal authority to ensure that the bank cannot be pressured to transmit the information illegally, including if necessary by issuing an order taking effective control of the data at USB," the country said in a filing to the Miami court....MORE
-Senator Carl Levin
March 3, 2009
What is up with the Swiss?
From this, a couple years ago: "Swiss in Liechtenstein 'invasion'", to this: "Swiss banker admits blackmailing BMW heiress" a couple days ago, it's the world turned upside down.
Now we read in Forbes:
Swiss Kick Off 'Currency War'Switzerland's latest move to weaken the Swiss franc marks the first time in the current financial crisis that a G10 nation has intervened in forex markets to support a flagging economy. It is probably only a matter of time before others--notably Japan--follow suit....MOREWe are already seeing markets react: "Gold rises on Swiss central bank move"
The Mises Economics blog asks, "What's the Deal With the Swiss?":
Open thread to discuss what happened to the land formerly known as the Western Shangri La.
- Delinked from gold in order to join the IMF and settle Nazi-era court cases.
- Caved to the IRS and the Germans on withholding tax information on expats.
- The SNB continues to sell gold in accordance to the Central Bank Gold Agreement.
- And now they are intentionally devaluing their currency.
What are they drinking over there? Got bored of eating cheese and chocolate on the Paradeplatz?
I hope this will end the way Switzerland's 1980's invasion of Lichtenstein did.
The locals gave the Swiss troops cookies and cocoa.
It may not, however. In a cunning flanking maneuver, Lichtenstein put out this press release:
March 12, 2009
Through this Declaration, Liechtenstein commits to, and will implement, global standards of transparency and exchange of information as developed by the OECD and will advance its participation in international efforts in order to counteract non-compliance with foreign tax laws.
With this Declaration, Liechtenstein clarifies its position regarding privacy and banking secrecy and confirms its readiness to speed up the negotiation of tax information exchange and other agreements with a view to having a network of such arrangements in place as soon as reasonably possible in order to address the global issue of tax fraud and tax evasion as well as double taxation. In this process, Liechtenstein will emphasise its responsibilities to address both the tax claims of other jurisdictions and the trust of its clients....
In purple ink! Take that, UBS.
UPDATE: Lichtenstein Wins! (Mutual Assured Destruction version of winning)
Switzerland caves in to pressure and signs up to tax-evasion fightSwitzerland has caved into the growing pressure on tax havens by pledging to co-operate with international standards on tax evasion.
In a landmark decision, the Swiss government said this morning it will adopt Organisation for Economic Co-operation and Development standards, which state that countries should work together on cases of suspected tax evasion....MORE
I may have been too tough on the Swiss in Friday's post "You can't trust the Swiss, that's the bottom line,".
*That was a favorite line of a now deceased friend. Had he lived to see these guys he'd have said it.
From the "You Don't See That Every Day" file, Basle's own Top Secret Drum Corps: