TAX DISPUTE: BERN SNUBS U.S. AUTHORITIES

U.S. officials have been probing about a dozen employees of a Swiss bank and have requested comprehensive data on them, including all their email correspondence. The data was to be used to prepare a case against them.

The request has however been turned down, for the time being at least. The Swiss federal tax office (ESTV) declined to cooperate with the U.S. authorities, «Neue Zuercher Zeitung» reported this week.

The tax authority has taken a much tougher stand than the Swiss financial market regulator (Finma), which at the height of the dispute with the U.S., delivered a comprehensive «Leaver» list with the names of former UBS clients at Swiss banks to the Americans.



ESTV based its decision on a Swiss Supreme Court ruling in December. In a case involving Ticino-based BSI, the court found the transfer of information on staff and lawyers was not permissible in terms of the official exchange of information between the two countries.

The latest request from the U.S. involves a single, unnamed Swiss bank, which is one of those under the category 2 list drawn up in December 2016 in the program agreed to settle the long-running tax dispute with the U.S.

Under the program the Americans are entitled to further information on Swiss bank employees, only however if it relates to individuals with U.S. tax obligations. In the latest U.S. request this was not the case, according to the Swiss. This doesn’t mean the Swiss bankers are in the clear as the U.S. can still resort to legal channels, ESTV notes, although the chances of success are slim.

As far as the latest data requests are concerned, the bank involved has already complied with its obligations to the U.S. tax authorities. The bank has paid a fine, signed an admission of guilt and supplied the names of employees and asset managers who had contact with U.S. clients.

Against this backdrop it is unlikely that the U.S. will renege on the agreement with the bank, Susan Emmenegger, professor at the banking institute at University of Bern, told «Neue Zuercher Zeitung». A U.S. court would have to accept the justice department’s application, which Emmenegger thinks unlikely. Not least because the two trials in the U.S. against bankers Raoul Weil and Stefan Buck failed.