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9th January 2009 News
UBS closing U.S. clients’ offshore accounts -NYT – http://www.reuters.com/article/governmentFilingsNews/idUSL952266420090109
ZURICH, Jan 9 (Reuters) – Under pressure from the U.S. tax authorities, Swiss wealth management giant UBS (UBSN.VX) (UBS.N) is closing all the offshore accounts of its rich U.S. clients, the New York Times said on Friday.
UBS, which the U.S. authorities says helped wealthy Americans hide cash in offshore bank accounts, will shut about 19,000 offshore accounts, the paper said, quoting unnamed U.S. clients.
A UBS spokesman in Switzerland was not immediately available to comment on the report.
The Swiss bank, one of the hardest-hit in the credit crisis, decided in July last year to stop offering offshore accounts to U.S. citizens after it was targeted by the U.S. tax investigation which challenges Switzerland’s famous banking secrecy laws.
As part of the investigation, U.S. authorities indicted UBS’s wealth management chief last year.
“UBS is progressing with the closing in an orderly fashion,” UBS spokeswoman Karina Byrne was quoted as saying in the U.S. paper.
U.S. prosecutors have alleged that UBS helped clients hide $18 billion of untaxed American money in undeclared accounts. This amounts to around $300 million of annual unpaid taxes, the newspaper said. UBS will transfer the U.S. clients’ assets to other banks or other divisions within UBS, or will mail checks directly to the account holders, creating paper trails for U.S. federal prosecutors who are checking whether UBS clients used such accounts to evade taxes.
“You can either transfer the money to new banks, or deposit somewhere and get busted,” a UBS client was quoted as saying in the newspaper report.
The transfer of more than $10,000 to a new bank is something that clients are expected to report to the Treasury Department, the paper said.
In a separate article, the Wall Street Journal said on Friday that many U.S. clients of UBS had started to voluntarily turn themselves in to the U.S. Internal Revenue Service. The clients have so far avoided serious punishment, the paper said. (Writing by Lisa Jucca; Editing by Greg Mahlich)
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