Results tagged “tax fraud”

UBS have forced out a top executive who formerly handled secret offshore bank accounts for wealthy Americans. The news comes as US authorities and the Swiss bank continue to lock horns in a tax fraud investigation centering on rich US citizens with undeclared offshore bank accounts.

The man in question, Martin Liechti, was put on paid leave according to a UBS spokesman. It is understood that the two parties are negotiating an exit agreement that might be acceptable to both.

Its not the first time Liechti has been in the news. In May of last year he was taken in for questioning by US authorities as part of their investigation into alledged tax evasion by UBS's US clients.The banker was detained for several months before being released and returning to his native Switzerland, a move which shocked many in the world of swiss offshore banking and beyond. Some Swiss private banks are now barring foreign travel for their top executives fearing similar arrests.

His removal will invite speculation as to how much information he gave the US authorities during his detention, and how much UBS are willing to give, as US pressure to break the legal stalement increases.

Liechti is not the only member of UBS top brass to leave the bank recently. The CEO,  chairman and several private bankers have all resigned or been forced out in the past few months.

Promised changes in Swiss bank secrecy will still not allow the US access to the information that want, according to tax haven expert Raymond Baker of Global Financial Integrity, a Washington-based think tank.

In an interview with swiss media agency swissinfo he maintains that recent decision to adopt OECD standards will not do enough to catch tax evaders.

 ''This announcement is not a significant step because it does not change Swiss laws on banking secrecy. In fact, what the Swiss government said in essence is that if a foreign government knows what it is looking for, the Swiss authorities will cooperate. But the government has given itself lots of leeway for denying requests for information.''

The Swiss for example have only agreed to hand over information in response to requests with specific evidence on a case by case basis. However Baker would rather they also gave in to so called 'fishing expeditions' even if evidence of illegality is unclear. He proposes that the OECD standards should be amended to allow for this:

''It is important that these standards are expanded, in particular to allow governments to request information from Switzerland and other tax havens, even if foreign governments only have reason to believe that funds are deposited there illegally.''

If the OECD model is changed as Baker suggests, the ramifications could be huge, with people worldwide losing the privilege of bank secrecy at the whim of another country or just because they have an offshore account. Baker also called for Switzerland to change its legal code to allow foreign governments easier access to personal data:

''I want Switzerland to end the distinction between tax fraud and tax evasion. This baffling distinction is becoming increasingly untenable. It is obvious that most of the funds deposited in tax havens violate the law. I would like Switzerland to take the lead.''

It's irresponsible and plain wrong to suggest that most funds in tax havens violate the law. Much may depend on whether citizens and governments worldwide are duped into giving up their rights by this type of rhetoric.