Opening the vaults

Miami-Dade county in southern Florida is accustomed to playing a starring role in world history. Most famously...

Written by The Indian Express | Published: July 11, 2009 2:57 am

Miami-Dade county in southern Florida is accustomed to playing a starring role in world history. Most famously,by far the most momentous US presidential election in recent memory was decided by a few hundred swing voters from the district. And now,in a local courtroom,a trans-continental drama is playing out that might have massive repercussions for the grey area where personal and international finance overlap. Judge Alan S. Gold of the Federal District Court,Miami,is hearing a case in which the US tax agency,the Internal Revenue Service or IRS,is battling the behemoth Swiss bank UBS. The disagreement: whether the bank has to turn over to the agency the names of thousands of its American clients that the IRS suspects of tax evasion.

Swiss bank secrecy is a byword,a plot point in a thousand bad airport novels,a common complaint where one or more honest taxpayers are gathered together. Could the tenor of the times indeed be so different from a few short months ago that a centuries-old tradition (so entrenched that even the Asterix comics could treat it as a Swiss national characteristic) is close to cracking? After all,Switzerland has revised its tax treaties with some countries,including the United States,to say that information will be provided on “individual cases where a specific and justified request has been made.”

But the IRS wants a set of 52,000 names. UBS,unsurprisingly,doesn’t view this as “individual cases”. Legal experts expect Judge Gold to rule against UBS; in preparation,the Swiss government has told UBS that if they hand the names out,they’re criminals in the eyes of Swiss authorities. (Top bank executives have already been disallowed from travelling outside Switzerland,for fear they’d be arrested elsewhere.) The ante has been upped quite thoroughly all round. Countries like India,that want names too,will watch carefully.

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