Swiss investment bank UBS plans to stop offering offshore banking to U.S. residents after the bank was questioned about its clients' tax avoidance practices at a Senate hearing.
At a Senate Permanent Subcommittee on Investigations hearing on tax haven banks and U.S. tax compliance, UBS Global Wealth Management and Business Banking CFO Mark Branson said the bank is working with U.S. authorities to identify the names of U.S. clients who may have engaged in tax fraud (see Levin Calls for Closing Down UBS).
"We have decided to exit entirely the business in question," said Branson. "That means UBS will no longer provide offshore banking or securities services to U.S. residents through our bank branches. Such services will only be provided to residents of this country through companies licensed in the United States. While we are winding down this business, there will be no new accounts opened and Swiss-based client advisors will not be permitted to travel to the United States for the purpose of meeting with U.S. clients."
UBS will also provide the names of U.S. clients who may have been using the Swiss bank accounts to hide their assets from taxation. "Client identity is generally protected from disclosure under Swiss law," said Branson. "But such privacy protections do not apply when disclosure of client names is requested in connection with an investigation of tax fraud and where the requests are presented to the Swiss government through established legal channels. We will fully support and assist that process."
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