| |
| |
 |
| |
|
| |
|
| |
|
MIAMI : A judge Monday postponed the opening of a trial in a lawsuit seeking to force Swiss financial giant UBS to reveal the identities of thousands of US clients with offshore accounts.
The judge agreed to a request from the US and Swiss governments as well as UBS to put off the start of the trial until August 3 to give all parties time to negotiate a settlement.
"I'm willing to grant this motion and encourage such negotiations. I would not be unwilling to grant further extensions rather than the contrary," Judge Alan Gold told the court in a hearing that lasted seven minutes.
Eugene Stearns, lawyer for UBS, told the court: "The two governments are in talks and we don't want to stand in the way of democracies."
In a statement, the Swiss-based banking giant called the granting of the postponement a "positive development that the governments will now engage in intensive discussions over the next two weeks and attempt to negotiate a resolution."
The team for the US government also said it agreed to a stay to allow the talks to proceed.
US authorities are asking a federal court to order UBS to reveal the names of American offshore account holders, saying the Swiss bank "systematically and deliberately" violated US laws.
The case stems from a lawsuit filed earlier this year and affects as many as 52,000 US taxpayers suspected of holding UBS offshore accounts to avoid paying US taxes.
Legal analysts say the case calls for a diplomatic rather than courtroom solution because it involves conflicting laws from two countries, but that a settlement will be difficult.
"UBS has been willing to write a check to make this go away," said Jacob Frenkel, a former US securities law enforcer who practices law in Maryland.
"That does not take care of the US government's concern about ensuring that its citizens are paying taxes."
The problem in reaching a compromise is that "the US government demands are striking at a fundamental principle and value within the Swiss financial system" on secrecy of bank information.
The US government could in theory ask the court to seize UBS assets in the United States until the bank complies, but some analysts argue this would send a chilling message to international financial institutions.
A former US tax official who practices law in Washington and is familiar with the UBS case said the Justice Department will not be satisfied if Americans can retain offshore UBS accounts to evade taxes.
"I don't think the US government would ever tolerate, no matter how this is settled, a continued world where the European financial institutions are playing 'hide the ball,'" he said, speaking on condition of anonymity.
But the attorney said UBS still has some leverage.
"If UBS wound up being destroyed and the Swiss were successful in holding back the files, that would not be a victory for the US," he said.
"They need some compliance so they can say to US taxpayers that the old offshore evasion game is dead. They need a victory, and victory is not UBS going out of business."
In a brief filed over the weekend, the Justice Department said that if no settlement is reached, it "will continue to vigorously pursue enforcement of the summons through the court."
UBS employed 26,934 people in the United States at the end of March, more than in its home country of Switzerland, where 25,889 were employed.
Its Wealth Management Americas division managed a massive 618 billion dollars (673 Swiss francs, 444 billion euros) worth of assets at the end of the first three months of this year, making up about 30 percent of total assets managed by the bank.
UBS has argued that it cannot comply with the US demand without violating Swiss banking secrecy law, which would make it liable for prosecution in Switzerland.
- AFP /ls
|
