Switzerland has better tax policy than America and a far stronger human-rights policy regarding personal privacy. This makes the IRS unhappy, since the tax police would like to find out if some Americans have overseas bank accounts.
In an odious display of fiscal imperialism, the Department of Justice is demanding that one of the Swiss banks divulge any information about American clients - even though this would mean imposing America’s bad law on a foreign institution operating on foreign soil.
Thankfully, the Swiss government has stepped in to ensure that the bank cannot be extorted.
Switzerland said it would seize UBS AG data to prevent the U.S. Justice Department from pursuing a U.S. court order seeking the identities of 52,000 American account holders in a crackdown on tax evaders. The assertion came in court papers yesterday in federal court in Miami, where the Justice Department sued UBS on Feb. 19, a day after the bank avoided U.S. prosecution for helping wealthy Americans evade taxes. The U.S. effort to enforce a summons seeking the names would force UBS to violate Swiss laws barring disclosure of such data, the filing said.
The Swiss government “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,” according to the filing.
…“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,” according to the filing.