So much for banking privacy at UBS: pursuant to terms of the Swiss-USG tax-evasion overhaul/settlement, the Wall Street Journal reported today that UBS AG will be handing over some 4,450 names of U.S. account holders. Both governements had cut the deal with UBS last week but the final settlement terms were not disclosed publicly till this morning.
It probably gives investors little solace that, according to the WSJ, that UBS will most likely not pay any fines as part of the deal.
While everyone agrees that tax "evasion" schemes are illegal, as someone who has been involved in international business for a very long time I know all too well that in the zeal for prosecutable examples, governments will too hastily label a legitimate tax-planning vehicle as "evasion"…almost always later losing in court.
I am uncomfortable with both the terms of the settlement AND with the fact that it was brokered/forced by bilateral partners as powerful as Switzerland and the U.S. The bottom line is that, for all intents and purposes, UBS AG was a voiceless participant in what were essentially bilateral negotiations between two very strong sovereign nations in search of a mutually beneficial and politically expedient resolution. In fact, if the Swiss-U.S. participants in the settlement had ordered UBS AG execs to wear chicken costumes, there'd feathers-aplenty in Zurich right now.
The settlement, to me, smacks of the kind of political maneuvering so often seen in troubled third world nations, when the U.N. and several sovereigns – invariably the U.S. – dictate a truce, a land redistribution, etc. – under polically expedient terms…which have little relationship to the real-world dynamics at hand and which – invariably – fail.
Hence Darfur.
My personal opinion: UBS AG offered one thing and one thing only to their clients: absolute, bullet-proof bank secrecy. Neither the threat of penal sanctions against the bank nor of arrest of its leaders should have led UBS AG to betray these initial 4,450 customers (regardless of their saintliness or lack thereof.) Remember, folks, we are talking at worst about sleazy tax evaders, not public threats to the welfare of the U.S. Subpoenas are issued judiciously to insure privacy; not so with bilateral tete-a-tetes designed for political expediency while running recklessly over the individual privacy rights of Americans.
Privacy laws in the U.S. have been and continue to be decimated, but can be challenged by a magnificent Constitution which ultimately protects fundamental rights. In the international arena, no such protections exist, and while one may not be sympathetic to U.S. tax-evaders, any Guantanameque move which treats fundamental fairness and rights as dispensible in the name of "tax enforcement" is fundamentally flawed.
You must be logged in to post a comment.