Banking secrecy
July 12, 2009
Presiding judge Alan Gold agreed to the request by UBS Bank, the US Justice Department and Swiss government authorities to delay the high-profile trial's opening until August 3. He added that he would gladly give further extensions "to assist in accomplishing any goal of settlement."
Gold also set a telephone status conference for July 29, when he said he hoped the participants would be prepared to say whether the Aug. 3 trial would take place as scheduled.
The parties involved had jointly requested the delay, saying they hope to reach an alternative settlement in the case.
"The stay was requested in order to provide the parties additional time to discuss a possible alternative resolution of the matter." the Department of Justice said in a statement.
Transparency vs. secrecy
The showdown scheduled for Monday would have pitted the United States government against Switzerland's long-cherished tradition of banking secrecy.
Authorities in the US have been asking Swiss financial giant UBS, the countries largest bank, to reveal the names of its US offshore account holders. The US says the bank has "systematically and deliberately" violated US laws.
The US claims that some 52,000 wealthy Americans are dodging taxes by hiding billions of dollars in UBS accounts. In general, authorities say the US loses about $100 billion every year from offshore tax schemes that allow for tax evasion.
Earlier this month, the Swiss government said it would not allow UBS to hand over the names. Switzerland said UBS would be violating Swiss law if it did so and be liable to prosecution.
"The parties have agreed that any alternative resolution reached would necessarily include a provision requiring UBS to provide the Internal Revenue Service information on a significant number of individuals with UBS accounts," the Justice Department said last Sunday.
The Justice Department said it would "vigorously" pursue enforcement of the summons through the courts If an alternative resolution was not reached.
Another fine?
UBS, one of the world's largest banks, agreed in February to pay $780 million and identify 250 US clients to settle criminal charges that it had helped rich Americans evade taxes.
That agreement was hailed by the US as having effectively pierced Swiss banking secrecy for the first time in history.
Analysts estimate that UBS could afford for pay up to $5.5 billion to settle the tax dispute out of court.
Wl/jam/Reuters/AFP/AP
Editor: Tony Dunham