=Swiss Bank Accounts=
A compromise with the United States on disclosure would be in the public interest.
THE UNITED States and Switzerland are in
negotiations to settle their dispute over the Zurich-based bank UBS's alleged role in tax evasion by U.S. citizens and residents. As readers will recall, UBS has already admitted running a vast covert scheme to help wealthy people park their cash in secret accounts, unreported to the Internal Revenue Service. The bank has agreed to pay
$780 million in fines and turn over the names of 300 U.S. clients -- two of whom have been arrested for hiding assets. But U.S. authorities have since filed a civil lawsuit seeking data on 52,000 Americans who, the U.S. government says, are hiding about $14.8 billion in Swiss accounts. UBS has refused, saying that to do so would violate Swiss bank secrecy law. The Swiss government upped the ante recently by declaring that it would confiscate the names rather than permit UBS to obey an American court order to release them.
This is an emotional issue on both sides. The U.S. government and its people are outraged that UBS would seek to profit this way; the Swiss government and its people see the U.S. demand as a threat to the legendary banking industry that supports a tenth of their economy. Yet both sides have a strong interest in resolving it peacefully: The Swiss and their banks need continued access to the U.S. market, and the United States needs Swiss help in diplomatic representation in such states as Iran and Cuba.
The question is how to get to yes. The U.S. demand for 52,000 names, though not quite the "fishing expedition" the Swiss allege, is rather broad. Washington should be willing to pare it, in return for guaranteed access to those accounts most likely to belong to tax cheats. For that to happen, the Swiss would have to bend their traditional rule. The Swiss say that they have already done that in a new tax treaty with the United States that allows their banks to release account information. But the agreement still requires the United States to know the names of the alleged wrongdoers first, which isn't always possible since many of them operate through shell corporations and other ruses.
Switzerland needs to move more. Yes, the country leveraged bank secrecy into great national wealth in the 20th century. But that business was born in the days when the neutral, fiercely independent mountain country could afford to thumb its nose at the rest of the world. Under contemporary circumstances, it is suffering the reputational harm that comes from being on the Organization for Economic Cooperation and Development's "gray list" of tax havens. There are honest private banks in Switzerland whose business has done well despite the disclosures forced on UBS. Do they and the rest of their countrymen really want their prosperity tied, whether in perception or reality, to the business of enabling corruption? If Switzerland chooses unreasonable bank secrecy over good relations with the United States, the Obama administration should not hesitate to make it pay a price.
http://www.washingtonpost.com/wp-dyn...071901685.html 
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