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UBS and Tax Evasion?

nexuscrawlernexuscrawler Registered User regular
edited August 2009 in Debate and/or Discourse
The Swiss bank UBS and United States federal prosecutors sought on Sunday to delay a hearing scheduled for Monday so the two sides could try to settle their closely watched dispute over the release of names of wealthy American clients of the bank who are suspected of offshore tax evasion.

But the postponement request, made in a joint legal filing in a federal court in Florida, came amid fresh threats by the Justice Department that it might impose financial sanctions on UBS and possibly indict the bank should it continue to refuse to disclose the names if required to do so by a judge.

“UBS has not yet faced all the consequences of its illegal conduct in the United States,” said a Justice Department filing in the case on Sunday.

The two sides are scheduled to square off on Monday in front of Judge Alan S. Gold of Federal District Court in Miami. The joint filing asked Judge Gold to delay the hearing and reschedule it for Aug. 3 if a settlement was not reached by then. Judge Gold is to decide on the postponement early Monday.

The dispute between UBS and the United States has escalated into a diplomatic drama and has threatened to pierce the veil of Swiss financial secrecy. UBS and the Swiss government have said they will not disclose client names, even if ordered by a judge, because doing so would violate Swiss laws governing financial secrecy and subject UBS executives to prosecution in Switzerland.

In February, the Internal Revenue Service, backed by the Justice Department, sued UBS, the world’s largest private bank and a pillar of the Swiss economy, to force it to disclose the names of 52,000 wealthy American clients suspected of tax evasion through UBS’s offshore private banking division.

The civil lawsuit came a day after UBS averted indictment by agreeing to pay $780 million to settle criminal accusations that it had defrauded the I.R.S. by allowing American clients to evade taxes by hiding billions of dollars in income offshore.

The Justice Department also increased its pressure on UBS on Sunday, saying in a separate filing that it would consider imposing unspecified monetary sanctions on the bank if it failed to turn over the names upon a judge’s order.

In the same memorandum, the Justice Department said failure to comply with an order to release the names might put the bank in breach of its $780 million settlement — a breach that could pave the way for prosecutors to indict UBS.

http://www.nytimes.com/2009/07/13/business/13ubs.html?_r=1&hpw

So looks like the pressure on The Swiss banks is heating up. The Feds are obviously playing this one very safe and quiet probably because of the diplomatic issues. Not to mention how many wealthy politicians and donors could easily get caught up in this. I think it's pretty impressive that they're trying at all considering the power of the banks and the amount of wealth involved. The diplomatic issues involved are pretty thorny too. the Swiss are claiming enforcing the release of names in the US could implicate Swiss execs for breaking their banking laws.

Still I think if UBS is pushing their services in the Us as a tax evasion method they should be punished under US laws. Thoughts on how this will play out?

nexuscrawler on
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    HachfaceHachface Not the Minister Farrakhan you're thinking of Dammit, Shepard!Registered User regular
    edited July 2009
    I love how the Swiss defense to these proceedings is essentially "But if this happens we won't be able to help people do illegal things anymore!"

    Hachface on
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    sanstodosanstodo Registered User regular
    edited July 2009
    Hachface wrote: »
    I love how the Swiss defense to these proceedings is essentially "But if this happens we won't be able to help people do illegal things anymore!"

    At least it shows that the US is taking tax shelters and other loopholes seriously. If we can't raise taxes to pay for all the programs people want, at least we can make sure our existing taxes are enforced.

    sanstodo on
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    OctoparrotOctoparrot Registered User regular
    edited July 2009
    Thoughts on how this will play out?

    The Judge's name is Gold? I have a feeling that he's gonna side with the bankers, if you know what I mean...

    In all seriousness I don't know how exactly U.S. federal law affects international entities- if UBS doesn't comply, what do they do, the corporate equivalent of an embargo?

    Octoparrot on
  • Options
    nexuscrawlernexuscrawler Registered User regular
    edited July 2009
    Octoparrot wrote: »
    Thoughts on how this will play out?

    The Judge's name is Gold? I have a feeling that he's gonna side with the bankers, if you know what I mean...

    In all seriousness I don't know how exactly U.S. federal law affects international entities- if UBS doesn't comply, what do they do, the corporate equivalent of an embargo?

    Forbidding them from doing business in the US in some manner? I too am curious about this.

    nexuscrawler on
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    logic7logic7 Registered User regular
    edited July 2009
    didn't we already have this discussion?

    logic7 on
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    DmanDman Registered User regular
    edited July 2009
    We may well have.
    I really want to see that list of names because I think it would implicate some serious heavy weights.

    I don't think the Swiss can avoid punishment by virtue of not being on US soil, they are going to have to settle this one way or another.

    I wouldn't be surprised if the Swiss are frantically calling people to tell them their name is on the list and they better tell the IRS to back the fuck off or they will be going down. It's frankly a testament to the independence and power of the IRS that this is even happening given how many powerful rich people are likely on that list.

    Dman on
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    kildykildy Registered User regular
    edited July 2009
    Octoparrot wrote: »
    Thoughts on how this will play out?

    The Judge's name is Gold? I have a feeling that he's gonna side with the bankers, if you know what I mean...

    In all seriousness I don't know how exactly U.S. federal law affects international entities- if UBS doesn't comply, what do they do, the corporate equivalent of an embargo?

    Forbidding them from doing business in the US in some manner? I too am curious about this.

    Throw them on a list whose name I'm blanking on, that your bank runs your transactions through before greenlighting them. And I'm not sure why I can't remember what that list is officially called.

    It's an interesting fight trying to figure out which of two conflicting laws an international entity is bound by. They're violating US law by not releasing the names, and will violate Swiss law if they do release them.

    kildy on
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    zeenyzeeny Registered User regular
    edited July 2009
    I don't think the Swiss can avoid punishment by virtue of not being on US soil, they are going to have to settle this one way or another.

    They aren't being punished. They are being blackmailed for their client's actions.

    Old thread:
    http://forums.penny-arcade.com/showthread.php?t=83418

    zeeny on
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    HachfaceHachface Not the Minister Farrakhan you're thinking of Dammit, Shepard!Registered User regular
    edited July 2009
    zeeny wrote: »
    I don't think the Swiss can avoid punishment by virtue of not being on US soil, they are going to have to settle this one way or another.

    They aren't being punished. They are being blackmailed for their client's actions.

    Old thread:
    http://forums.penny-arcade.com/showthread.php?t=83418

    Uh. Helping someone evade taxes is itself a crime. Its their actions as much as their clients'.

    Hachface on
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    kildykildy Registered User regular
    edited July 2009
    zeeny wrote: »
    I don't think the Swiss can avoid punishment by virtue of not being on US soil, they are going to have to settle this one way or another.

    They aren't being punished. They are being blackmailed for their client's actions.

    Old thread:
    http://forums.penny-arcade.com/showthread.php?t=83418

    Buh? You're going to have to hold my hand a bit on this one. UBS admitted that some of their employees actively participated in a scheme to defraud the IRS. The only person saying blackmail is you, and you don't seem to back it up with anything. UBS admitted wrongdoing.

    kildy on
  • Options
    zeenyzeeny Registered User regular
    edited July 2009
    kildy wrote: »
    zeeny wrote: »
    I don't think the Swiss can avoid punishment by virtue of not being on US soil, they are going to have to settle this one way or another.

    They aren't being punished. They are being blackmailed for their client's actions.

    Old thread:
    http://forums.penny-arcade.com/showthread.php?t=83418

    Buh? You're going to have to hold my hand a bit on this one. UBS admitted that some of their employees actively participated in a scheme to defraud the IRS.

    When?
    And I'm really not going to repeat my position from the last thread, but, unless there are news I've missed, it hasn't changed.

    zeeny on
  • Options
    zeenyzeeny Registered User regular
    edited July 2009
    Hachface wrote: »
    zeeny wrote: »
    I don't think the Swiss can avoid punishment by virtue of not being on US soil, they are going to have to settle this one way or another.

    They aren't being punished. They are being blackmailed for their client's actions.

    Old thread:
    http://forums.penny-arcade.com/showthread.php?t=83418

    Uh. Helping someone evade taxes is itself a crime. Its their actions as much as their clients'.

    It's not. It does fall under criminal law, but is a misdemeanor and that's exactly why Swiss law does not allow them to produce the names.

    zeeny on
  • Options
    kildykildy Registered User regular
    edited July 2009
    zeeny wrote: »
    kildy wrote: »
    zeeny wrote: »
    I don't think the Swiss can avoid punishment by virtue of not being on US soil, they are going to have to settle this one way or another.

    They aren't being punished. They are being blackmailed for their client's actions.

    Old thread:
    http://forums.penny-arcade.com/showthread.php?t=83418

    Buh? You're going to have to hold my hand a bit on this one. UBS admitted that some of their employees actively participated in a scheme to defraud the IRS.

    When?
    And I'm really not going to repeat my position from the last thread, but, unless there are news I've missed, it hasn't changed.

    You.. you linked a thread in that quote tree that says that in post #1.

    edit: just to be nice, the initial document off the DOJ's website.
    UBS acknowledged that, beginning in 2000 and continuing through 2007, it participated in a scheme to defraud the United States and the IRS, through its cross-border business. UBS private bankers and managers actively facilitated the creation of accounts in the names of offshore companies, allowing United States taxpayers to conceal their ownership or beneficial interest in the accounts in an effort to evade United States tax reporting and payment requirements. UBS also admitted in the deferred prosecution agreement that it had failed to implement effective controls to detect and prevent the unlawful activity, and that it had failed to initiate an effective investigation into credible allegations of such unlawful activity, and had failed to take effective action to stop such activities.

    http://www.usdoj.gov/tax/DOJ_Testimony_JDicicco.pdf

    kildy on
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    kildykildy Registered User regular
    edited July 2009
    zeeny wrote: »
    Hachface wrote: »
    zeeny wrote: »
    I don't think the Swiss can avoid punishment by virtue of not being on US soil, they are going to have to settle this one way or another.

    They aren't being punished. They are being blackmailed for their client's actions.

    Old thread:
    http://forums.penny-arcade.com/showthread.php?t=83418

    Uh. Helping someone evade taxes is itself a crime. Its their actions as much as their clients'.

    It's not. It does fall under criminal law, but is a misdemeanor and that's exactly why Swiss law does not allow them to produce the names.
    Any person who willfully attempts in any manner to evade or defeat any tax imposed by this title or the payment thereof shall, in addition to other penalties provided by law, be guilty of a felony and, upon conviction thereof, shall be fined not more than $100,000 ($500,000 in the case of a corporation), or imprisoned not more than 5 years, or both, together with the costs of prosecution

    Actually, it's a felony here, and a misdemeanor to the Swiss. Which is why this case is interesting. UBS committed the crime here, where it's a felony, and all involved are guilty of felonies. In their home country, it's not, and releasing the information would be a felony.

    See the reason this is interesting?

    kildy on
  • Options
    zeenyzeeny Registered User regular
    edited July 2009
    kildy wrote: »
    zeeny wrote: »
    kildy wrote: »
    zeeny wrote: »
    I don't think the Swiss can avoid punishment by virtue of not being on US soil, they are going to have to settle this one way or another.

    They aren't being punished. They are being blackmailed for their client's actions.

    Old thread:
    http://forums.penny-arcade.com/showthread.php?t=83418

    Buh? You're going to have to hold my hand a bit on this one. UBS admitted that some of their employees actively participated in a scheme to defraud the IRS.

    When?
    And I'm really not going to repeat my position from the last thread, but, unless there are news I've missed, it hasn't changed.

    You.. you linked a thread in that quote tree that says that in post #1.

    I thought you were referring to the extended list with the thousands of names?
    They have handed the names of all "tax fraud" cases already.

    zeeny on
  • Options
    werehippywerehippy Registered User regular
    edited July 2009
    kildy wrote: »
    Actually, it's a felony here, and a misdemeanor to the Swiss. Which is why this case is interesting. UBS committed the crime here, where it's a felony, and all involved are guilty of felonies. In their home country, it's not, and releasing the information would be a felony.

    See the reason this is interesting?

    Actually that is the most interesting point in this whole thing, and the one that can have the broadest reaching implications. For the sake of argument, say a US citizen physically goes to Switzerland and a company there engages with the person in an action that is illegal in the US but not in Switzerland.

    How culpable exactly is the company in the crime the US citizen committed? How responsible would a US subsidiary of the company be if no one in the subsidiary had anything to do with the illegal activity? What about cases like this where it's illegal in the companies home country to comply with the law in the country where their subsidiary is located?

    The US has traditionally run roughshod over issues of national sovereignty when enforcing our laws, but we've also traditionally limited ourselves to violent crime where there's at least arguably a clear and present danger to the US. Seeing how this will play out in a nonviolent arena will be significant.

    werehippy on
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    nexuscrawlernexuscrawler Registered User regular
    edited July 2009
    Well a big part of why the IRS is so pissed is UBS reps in the US were specifically marketing their services as a tax shelter.

    nexuscrawler on
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    zeenyzeeny Registered User regular
    edited July 2009
    kildy wrote: »
    zeeny wrote: »
    Hachface wrote: »
    zeeny wrote: »
    I don't think the Swiss can avoid punishment by virtue of not being on US soil, they are going to have to settle this one way or another.

    They aren't being punished. They are being blackmailed for their client's actions.

    Old thread:
    http://forums.penny-arcade.com/showthread.php?t=83418

    Uh. Helping someone evade taxes is itself a crime. Its their actions as much as their clients'.

    It's not. It does fall under criminal law, but is a misdemeanor and that's exactly why Swiss law does not allow them to produce the names.
    Any person who willfully attempts in any manner to evade or defeat any tax imposed by this title or the payment thereof shall, in addition to other penalties provided by law, be guilty of a felony and, upon conviction thereof, shall be fined not more than $100,000 ($500,000 in the case of a corporation), or imprisoned not more than 5 years, or both, together with the costs of prosecution

    Actually, it's a felony here, and a misdemeanor to the Swiss
    .

    The use of the word actually assumes a contradiction with what I said before. Did you misread something?
    Which is why this case is interesting. UBS committed the crime here, where it's a felony, and all involved are guilty of felonies. In their home country, it's not, and releasing the information would be a felony.

    Except, no proof has surfaced about UBS engaging in the activity on US soil. They have an admittance of guilt at gunpoint and the DOJ keeps pushing by using their US assets pretty much as hostage against cooperation and due process or international relations be damned. The case is not interesting, because it doesn't follow logic, but strong arm politics.
    See the reason this is interesting?

    Thank you. I get it now.

    zeeny on
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    kildykildy Registered User regular
    edited July 2009
    Well a big part of why the IRS is so pissed is UBS reps in the US were specifically marketing their services as a tax shelter.

    This, and this is a lot of the reason UBS can't hide behind swiss law entirely on this case. They were operating in the US and selling a service or product that was illegal in the US (as intended to be used)

    They could get away with a lot until they were actively operating in another country. At that point they're in a mess of legal issues and causing this current crisis. US law tends to be overbearing and go outside it's jurisdiction a lot of the time, but to me at least, it's the Swiss banking laws that are running roughshod over national sovereignty. If UBS was operating in the US, they have no legitimate claim for it's US based business to not adhere to US accounting laws and the US legal system.

    edit: Zeeny: There's an admission of guilt by the bank. You're going to keep accusing the IRS and the DOJ of getting the confession under duress with no evidence of such, and I'm going to keep disagreeing. Considering they released the information of the tax frauds, that seems to leave us with a simple choice:

    A) UBS committed fraud and created tax fraud documents for 200 people that were not actually tax frauds
    B) UBS released the 200 tax fraud's information, and thus it's pretty logical to assume that the rest of testimony is also true.

    I've seen no evidence that UBS was held at gunpoint to confess to crimes. Held at proverbial gunpoint from both sides (the US and the Swiss) over releasing names, yes. But that's not creating duress in admitting guilt, that's simply two countries fighting over whose laws apply here.

    kildy on
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    zeenyzeeny Registered User regular
    edited July 2009
    kildy wrote: »
    Well a big part of why the IRS is so pissed is UBS reps in the US were specifically marketing their services as a tax shelter.

    This, and this is a lot of the reason UBS can't hide behind swiss law entirely on this case. They were operating in the US and selling a service or product that was illegal in the US (as intended to be used)

    They are not obliged under law to report the foreign bank accounts of their clients. This is every holder's duty. If the individuals have done it, UBS wouldn't even be mentioned in this.

    zeeny on
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    kildykildy Registered User regular
    edited July 2009
    zeeny wrote: »
    kildy wrote: »
    Well a big part of why the IRS is so pissed is UBS reps in the US were specifically marketing their services as a tax shelter.

    This, and this is a lot of the reason UBS can't hide behind swiss law entirely on this case. They were operating in the US and selling a service or product that was illegal in the US (as intended to be used)

    They are not obliged under law to report the foreign bank accounts of their clients. This is every holder's duty. If the individuals have done it, UBS wouldn't even be mentioned in this.

    This would be true if the allegations hadn't stuck that they were actively marketing this as a service for tax fraud. At that point they're accessories under US law.

    For what it's worth, Germany is also investigating UBS for the same practice.

    Edit: currently one former UBS banker is cooperating with authorities to prosecute this, after pleading guilty to selling tax fraud for UBS. Another is currently listed as a fugitive, after seemingly fleeing from his indictment. I can't find a decent DOJ source on the second, however.

    kildy on
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    KetherialKetherial Registered User regular
    edited July 2009
    zeeny wrote: »
    Except, no proof has surfaced about UBS engaging in the activity on US soil. They have an admittance of guilt at gunpoint and the DOJ keeps pushing by using their US assets pretty much as hostage against cooperation and due process or international relations be damned. The case is not interesting, because it doesn't follow logic, but strong arm politics.

    you say this like it's a bad thing.

    americans are breaking american laws. ubs is actively facilitating this, purely for its own financial benefit. the u.s. wants this to stop.

    i don't see how any reasonable person can disagree. if we were asking ubs to stop applying its own laws to its own swiss citizens, that would be unreasonable, no question. but that's not what we're doing. we're telling them that their confidentiality laws do not apply to american citizens, especially because such laws were specifically designed to assist americans in breaking american laws.

    it all seems pretty cut and dry to me. am i missing something?

    Ketherial on
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    zeenyzeeny Registered User regular
    edited July 2009
    Not much more to say. I fail in front of such simple logic.
    Questions like "Why can't the same due process be observed for the other thousands upon thousands of names?" really have no place in this discussion, it seems.
    it all seems pretty cut and dry to me. am i missing something?
    edit: You're misinterpreting my position that I'm against the release of all the holders names. No, I'm against the way by which the DOJ is trying to force the Swiss side to release said names.

    zeeny on
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    DmanDman Registered User regular
    edited July 2009
    zeeny wrote: »
    Except, no proof has surfaced about UBS engaging in the activity on US soil. They have an admittance of guilt at gunpoint and the DOJ keeps pushing by using their US assets pretty much as hostage against cooperation and due process or international relations be damned. The case is not interesting, because it doesn't follow logic, but strong arm politics.

    UBS may have admitted doing wrong at gunpoint but that gun is the result of one of their own employees being caught breaking US tax laws and turning whistle blower....my sympathy is not great and I'm not inclined to believe they admitted to wrongdoing they didn't commit because of strong arms politics. They knew they were breaking US laws and they didn't care.
    On May 14, 2008, former UBS employee Bradley Birkenfeld and a Liechtenstein businessman were charged by the US authorities with helping an American billionaire avoid paying taxes on $200 million of assets deposited in Swiss and Liechtenstein bank accounts.

    Birkenfeld turned whistleblower, giving details of UBS private banking practices to US prosecutors.

    In July, a Miami court authorised the Internal Revenue Service to issue a summons on UBS demanding the release of confidential information on clients the agency suspected of tax evasion.

    In the same month, UBS told a congressional hearing that it would stop offshore banking activities for US clients.

    UBS agreed to pay $780 million and name some United States clients to resolve criminal fraud charges against it.
    http://www.swissinfo.ch/eng/front.html?siteSect=109&ty=st&sid=10900272

    Dman on
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    kildykildy Registered User regular
    edited July 2009
    zeeny wrote: »
    Not much more to say. I fail in front of such simple logic.
    Questions like "Why can't the same due process be observed for the other thousands upon thousands of names?" really have no place in this discussion, it seems.

    Because what you're doing is saying that Swiss law trumps US law on US soil.

    If UBS was a swiss company with no US presence, they'd be golden and able to say "Swiss law says we don't have to, nyah."

    However, they have a US company that has been found guilty of accessory tax fraud. As such, the US court system is asking the US company to release documents as allowed by US law. The penalty for not doing so would be to cease business in the US. This is pretty cut and dry.

    The problem is they're trying to claim only swiss law applies to them, even though the actions and actors are all located in the US.

    I'm failing to see how your logic works. You're essentially applying diplomatic immunity theory to a company.

    kildy on
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    werehippywerehippy Registered User regular
    edited July 2009
    Well a big part of why the IRS is so pissed is UBS reps in the US were specifically marketing their services as a tax shelter.

    H'uh, I wouldn't have thought anyone senior enough to put the company as a whole on the hook would be stupid enough to do that. Once the subsidiary actively broke US law while in the US that does remove the vast bulk of the ambiguity. There's still a potentially interesting point around divulging other accounts at non-US subsidiary branches, but that's more of a matter of parsing the US law to see how far the net from the original lawbreaking can extend, but it's not nearly of the same caliber of significance.

    werehippy on
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    zeenyzeeny Registered User regular
    edited July 2009
    kildy wrote: »
    zeeny wrote: »
    Not much more to say. I fail in front of such simple logic.
    Questions like "Why can't the same due process be observed for the other thousands upon thousands of names?" really have no place in this discussion, it seems.

    Because what you're doing is saying that Swiss law trumps US law on US soil.

    No, what I"m saying is that when you ask for cooperation from a foreign entity, you need to satisfy both legal systems, but the US side is unwilling to do the work. Actually, I'm going to quote that for you:
    The brief had argued that when the US and another country entered a treaty that established an agreed process for obtaining administrative assistance in tax matters, the treaty process should be honoured, particularly if the alternative was, as in the present case, to impose US law on a Swiss bank in a way that would require the bank to violate Swiss law

    zeeny on
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    KetherialKetherial Registered User regular
    edited July 2009
    zeeny wrote: »
    Not much more to say. I fail in front of such simple logic.
    Questions like "Why can't the same due process be observed for the other thousands upon thousands of names?" really have no place in this discussion, it seems.
    it all seems pretty cut and dry to me. am i missing something?
    edit: You're misinterpreting my position that I'm against the release of all the holders names. No, I'm against the way by which the DOJ is trying to force the Swiss side to release said names.

    but the swiss are applying swiss laws to americans which the u.s. has already said do not apply to americans.

    i mean, are we talking about refugees here or something? why should americans be protected by more comprehensive laws than what america provides, if the sole purpose of such swiss laws is to allow americans to break american laws?

    if we were talking about human rights' violations or some shit like that, it would be pretty easy to be angry with an overreaching goverment. but let's be honest with ourselves here. what are we talking about? rich people trying to evade taxes. i see no interest in protecting these people, whatsoever.

    Ketherial on
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    zeenyzeeny Registered User regular
    edited July 2009
    werehippy wrote: »
    Well a big part of why the IRS is so pissed is UBS reps in the US were specifically marketing their services as a tax shelter.
    There's still a potentially interesting point around divulging other accounts at non-US subsidiary branches, but that's more of a matter of parsing the US law to see how far the net from the original lawbreaking can extend, but it's not nearly of the same caliber of significance.

    Mmm, I thought all accounts were under the control of the mother corporation and not the subsidiary and that's exactly why the Swiss are involved?

    zeeny on
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    kildykildy Registered User regular
    edited July 2009
    zeeny wrote: »
    kildy wrote: »
    zeeny wrote: »
    Not much more to say. I fail in front of such simple logic.
    Questions like "Why can't the same due process be observed for the other thousands upon thousands of names?" really have no place in this discussion, it seems.

    Because what you're doing is saying that Swiss law trumps US law on US soil.

    No, what I"m saying is that when you ask for cooperation from a foreign entity, you need to satisfy both legal systems, but the US side is unwilling to do the work. Actually, I'm going to quote that for you:
    The brief had argued that when the US and another country entered a treaty that established an agreed process for obtaining administrative assistance in tax matters, the treaty process should be honoured, particularly if the alternative was, as in the present case, to impose US law on a Swiss bank in a way that would require the bank to violate Swiss law

    The existing treaty has a slight issue. It demands the other side reveal banking information if the first side can prove a felony.

    Now for the part being argued: a felony on which side. The document isn't clear. And in this case, the US want something released that's a felony to them (and committed on US soil), but not a felony to the other side. The accounts that both parties agreed were felonies were already handed over.

    So how do you solve this, if not through the courts?

    kildy on
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    kildykildy Registered User regular
    edited July 2009
    zeeny wrote: »
    werehippy wrote: »
    Well a big part of why the IRS is so pissed is UBS reps in the US were specifically marketing their services as a tax shelter.
    There's still a potentially interesting point around divulging other accounts at non-US subsidiary branches, but that's more of a matter of parsing the US law to see how far the net from the original lawbreaking can extend, but it's not nearly of the same caliber of significance.

    Mmm, I thought all accounts were under the control of the mother corporation and not the subsidiary and that's exactly why the Swiss are involved?

    That's a sticky point to multinational corporations, and something the IRS accuses UBS of doing on purpose to aid in this whole scheme.

    In most cases if you had multiple subsidiaries in multiple countries, they keep their business to themselves for legal reasons. Specifically to avoid another two conflicting laws from applying to you.

    kildy on
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    zeenyzeeny Registered User regular
    edited July 2009
    kildy wrote: »
    zeeny wrote: »
    werehippy wrote: »
    Well a big part of why the IRS is so pissed is UBS reps in the US were specifically marketing their services as a tax shelter.
    There's still a potentially interesting point around divulging other accounts at non-US subsidiary branches, but that's more of a matter of parsing the US law to see how far the net from the original lawbreaking can extend, but it's not nearly of the same caliber of significance.

    Mmm, I thought all accounts were under the control of the mother corporation and not the subsidiary and that's exactly why the Swiss are involved?

    That's a sticky point to multinational corporations, and something the IRS accuses UBS of doing on purpose to aid in this whole scheme.

    In most cases if you had multiple subsidiaries in multiple countries, they keep their business to themselves for legal reasons. Specifically to avoid another two conflicting laws from applying to you.

    No. The document talks ONLY about tax fraud which is pursued under both jurisdictions. Tax evasion is not mentioned at all.

    zeeny on
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    kildykildy Registered User regular
    edited July 2009
    zeeny wrote: »
    kildy wrote: »
    zeeny wrote: »
    werehippy wrote: »
    Well a big part of why the IRS is so pissed is UBS reps in the US were specifically marketing their services as a tax shelter.
    There's still a potentially interesting point around divulging other accounts at non-US subsidiary branches, but that's more of a matter of parsing the US law to see how far the net from the original lawbreaking can extend, but it's not nearly of the same caliber of significance.

    Mmm, I thought all accounts were under the control of the mother corporation and not the subsidiary and that's exactly why the Swiss are involved?

    That's a sticky point to multinational corporations, and something the IRS accuses UBS of doing on purpose to aid in this whole scheme.

    In most cases if you had multiple subsidiaries in multiple countries, they keep their business to themselves for legal reasons. Specifically to avoid another two conflicting laws from applying to you.

    No. The document talks ONLY about tax fraud which is pursued under both jurisdictions. Tax evasion is not mentioned at all.

    Then by your logic, the tax evasion cases should be handled by the court, or flat out dropped.

    edit: two questions: What do you think the proper method of chasing a tax evasion scheme outside the country IS, exactly, if not through the courts

    and second: http://www.washingtonpost.com/wp-dyn/content/article/2009/07/07/AR2009070702603.html implies that this settlement is actively involving the swiss government to make sure that the release is legitimate from all sides.

    But the final end to the matter is: a foreign country is actively facilitating and aiding the commissions of felonies on US soil. What do you personally think the proper response to that is, if not the US court system.

    kildy on
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    ThanatosThanatos Registered User regular
    edited July 2009
    UBS actively assisted U.S. citizens in avoiding U.S. taxes. Very wealthy U.S. citizens. If all of their U.S. assets aren't seized by the federal government, they're getting off light.

    So, as for the complaint that their assets being "held hostage," I say they can fuck right the hell off. The U.S. is offering to let them off relatively lightly in exchange for being able to pursue additional people who have been stealing from the U.S. government. And the only reason it isn't a fucking felony in Switzerland is because tax fraud is a goddamn industry over there. If they don't want to let their banks hand over the information, fine, but they don't get to bitch when their banks are no longer welcome to do business in law-abiding countries without having their assets seized.

    Thanatos on
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    ThanatosThanatos Registered User regular
    edited July 2009
    Seriously, zeeny, would you be accusing a prosecutor of "strongarm tactics" for offering to take the death penalty off the table for a serial killer if he'd just tell people where he buried the bodies? Because it's the exact same fucking thing.

    Thanatos on
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    SaammielSaammiel Registered User regular
    edited July 2009
    Thanatos wrote: »
    And the only reason it isn't a fucking felony in Switzerland is because tax fraud is a goddamn industry over there. If they don't want to let their banks hand over the information, fine, but they don't get to bitch when their banks are no longer welcome to do business in law-abiding countries without having their assets seized.

    You just don't understand. See the Swiss have to have banking secrecy to protect the little people from oppressive dictators! The fact that refugees rarely have the resources to access and use Swiss banking is of little concern to the Swiss. It's their heritage or some such tripe after all.

    UBS is likely boned. They are engaged in an unpopular practice at a time when banking at large is under seige from populist rhetoric. There is international pressure on many fronts for the Swiss banking system to stop abetting tax evasion and they just don't have enough clout to stop this train from rolling. At best they can probably gain some concessions and in return not be the subject of punative sanctions by numerous large trading partners. Quite frankly, I have problems mustering any sympathy whatsoever for their plight.

    Saammiel on
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    Andrew_JayAndrew_Jay Registered User regular
    edited July 2009
    werehippy wrote: »
    For the sake of argument, say a US citizen physically goes to Switzerland and a company there engages with the person in an action that is illegal in the US but not in Switzerland.

    How culpable exactly is the company in the crime the US citizen committed?
    Well, the culpability of your U.S. citizen is also in question here. The U.S. applies the territorial principle for international crimes - you can only be prosecuted for violations of U.S. law that occur in the U.S.

    However, I would imagine that any law aimed towards tax avoidance and off-shore banking would anticipate that and include some wording to the effect that nationality will also apply. Plus, the argument will always exist that the crime was committed at least partly in the U.S.

    EDIT: saw the link in the old thread which goes back to the deferred prosecution agreement, where it's pretty clear that the evasion took place in the U.S.

    Andrew_Jay on
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    enc0reenc0re Registered User regular
    edited July 2009
    Sticky situation all the way around. Let's just keep in mind a few basic facts:

    Tax evasion is illegal in both Switzerland and the US.
    Tax avoidance is legal in both Switzerland and the US.

    Switzerland has laws protecting your privacy in banking (bank secrecy). They are very similar to attorney-client and doctor-patient privileges in the US. These did not come about to help Americans evade taxes.

    Now here's the rub. In the US, tax evasion outweighs privacy; so if you cheat on your taxes, you lose your bank secrecy. In Switzerland, privacy outweighs tax evasion; so cheating on your taxes is insufficient grounds to lose your bank secrecy. Obviously more serious transgressions (e.g. money laundering) trump bank secrecy.

    Long story short, look at this from the Swiss perspective. Or even better, think about how we would react, if a China demanded that a US firm hand over protected attorney-client or doctor-patient information because laws were broken there. We'd probably be bitching about attorney-client being sacrosanct and that it should never be handed over.

    tl;dr: Foreign countries have laws too. Sometimes they are different from US law.

    enc0re on
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    ThirithThirith Registered User regular
    edited July 2009
    It's funny how over here the main reaction is "Yeah, well, America should clean up in its own back yard first, y'know?" As if that was anything else than a kid's sandbox defense: "I didn't do it! And anyway, they did something bad too!"

    Thirith on
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    "Nothing is gonna save us forever but a lot of things can save us today." - Night in the Woods
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    ThanatosThanatos Registered User regular
    edited July 2009
    Saammiel wrote: »
    Thanatos wrote: »
    And the only reason it isn't a fucking felony in Switzerland is because tax fraud is a goddamn industry over there. If they don't want to let their banks hand over the information, fine, but they don't get to bitch when their banks are no longer welcome to do business in law-abiding countries without having their assets seized.

    You just don't understand. See the Swiss have to have banking secrecy to protect the little people from oppressive dictators! The fact that refugees rarely have the resources to access and use Swiss banking is of little concern to the Swiss. It's their heritage or some such tripe after all.

    UBS is likely boned. They are engaged in an unpopular practice at a time when banking at large is under seige from populist rhetoric. There is international pressure on many fronts for the Swiss banking system to stop abetting tax evasion and they just don't have enough clout to stop this train from rolling. At best they can probably gain some concessions and in return not be the subject of punative sanctions by numerous large trading partners. Quite frankly, I have problems mustering any sympathy whatsoever for their plight.
    Yeah, you gotta wonder how much of that $780 million fine is going to be paid with Nazi gold.

    Thanatos on
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