THE US blasted a hole in Switzerland’s famed bank secrecy yesterday as Bern agreed to reveal the names of 4,450 wealthy Americans holding offshore accounts at UBS, the country’s biggest bank.
Washington hailed the deal as a victory in the clampdown on tax evasion, and indicated it would be the foundation of efforts to pursue other foreign banks.
“This agreement sends an unmistakable message to people hiding income and assets offshore,” said Douglas Shulman, commissioner of the Internal Revenue Service, the US tax authority. “The IRS will vigorously pursue tax cheats around the world, no matter how remote or secret the location.”
He said the IRS would receive an “unprecedented amount of information on tax evaders” and data of the “greatest interest to us” as a result of the agreement.
Swiss ministers tried to play down the implications of the deal by arguing that Bern had already agreed in March to accept international standards on tax co-operation after mounting pressure from the G20 group of industrial and developing countries.
However, lawyers said Washington’s aggressive pursuit of UBS had become an international showcase and was likely to be monitored by other authorities determined to tackle tax evasion.
The criteria used to select the names on the UBS list will only be revealed in three months in a deliberate strategy by the IRS to maximise uncertainty and put pressure on more of the bank’s estimated 52,000 US offshore customers to come forward voluntarily. Lawyers said the most likely criterion would be the use of sham companies, allowing account holders to exploit loopholes in US tax rules.
The US authorities have hinted that many clients have come clean to take advantage of more lenient punishments. They have extended a formal deadline for self-declaration. – (Copyright The Financial Times Limited 2009)
