More on this topic — the ongoing effort of the United States government to squeeze UBS and the Swiss government into turning over names of U.S. persons with accounts at UBS. Today’s Tax Notes Today has an article (citation 2009 TNT 129-1) with an overview of the brief filed in Federal Court by the Swiss government. Quoting the article which quotes the Swiss government’s amicus brief:
“UBS is unable to comply with the summons without violating Swiss law,” the Swiss government wrote. “The Government of 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 UBS that is the subject of the summons and expressly prohibiting UBS from attempting to comply.”
Switzerland asserts that issuing such an order would constitute an “Act of State” that would be outside the authority of the U.S. court to review.
“It is hoped that it will be unnecessary for the Government of Switzerland to take the extraordinary action of issuing an order to seize the information at issue, but such an action should be expected if the IRS continues to pressure UBS to violate Swiss law,” the Swiss government wrote.
In challenging the DOJ’s argument that enforcement of the summons would not breach international comity, the Swiss government noted that while it “did not condone” UBS’s actions, it does not believe there is a “basis for cancelling privacy protections for account holders for which there are no specific allegations of wrongdoing.”
In one of the final footnotes, Switzerland also issued a thinly veiled threat regarding the future of the recently initialed protocol to the Switzerland-U.S. tax treaty. It notes that a DOJ memorandum informed the court that the two governments had completed negotiations on the protocol “notwithstanding the pendency of this case.”
“If that comment was intended to suggest that the pendency of this case will have no effect on the treaty, it must be noted that the draft treaty has been neither signed nor ratified,” the Swiss government wrote.
The Gods are playing dice. Time to take your stakes off the table for a while.
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the US should back off this embarrasing, laughable venture of trying to bully another country into complying with our laws.
Why don’t we use this kind of pressure to force the North Koreans and Iranians to comply with our civil rights laws.
If the the US ,and Senator Levin,Pres.Obama and his croneys would have spent all this time and OUR money on trying to be competitive with the Swiss banks, we wouldn’t have a problem. The US is a big tax haven to citizens of all countries, (except the USA.) Non resident aliens pay no tax on interest earned in our banks. What would we do if Germany bullyed us into giving up those name to their home country? would we do it? no way! it would violate OUR laws. Countries all over the world are laughing at our greedy polititians trying to force another country to turn over those names to get more money to squander. this is very embarassing!