Ethics and governance in the European Financial centers

The Times and other media have reported that a federal court took the unprecedented step of demanding that the Swiss bank hand over the names of as many as 20,000 of its customers

The US law requires a US taxpayer to report all financial accounts in a foreign country if the total value of the accounts exceeds $10,000. Failure to report a foreign account can lead to a penalty of up to 50 per cent of the amount in the account at the time of the violation.This is the first time that the US courts have authorised such a request over a foreign bank and the move could put it on a collision course with the authorities in Switzerland, where it is illegal for banks to disclose confidential information without client approval because of the banking secrecy.

In a statement, the bank said: “UBS takes this matter very seriously and is working diligently with both Swiss and US government authorities, consistent with Swiss law and the legal frameworks for intergovernmental cooperation and assistance.”