29 Jul 2019
Switzerland’s highest court has ruled that historical data about 40,000 UBS (UBSG.S) clients must be handed to French tax authorities in a landmark case that could set a precedent for foreign governments seeking information from Swiss banks.
Three of the five judges presiding at the Swiss Supreme Court on Friday voted to overthrow a lower court’s ruling last year, giving the green light for Swiss tax authorities to provide the data to their French counterparts, while blocking use of the data as evidence against the bank itself.
The Supreme Court’s ruling is being closely watched for the impact it might have on the Swiss bank’s 4.5 billion euro ($5 billion) legal battle with France in a criminal case over alleged tax avoidance by UBS clients.
Revenue-hungry governments, for years thwarted by Switzerland’s strict secrecy rules, are also likely to be monitoring developments to see if they can use historical evidence of their citizens trying to hide money from tax authorities.
The Swiss Bankers Association said the decision could increase the risk of governments sending out requests simply fishing for information, adding that there could also be a danger of data being used for other purposes.
Although Switzerland exchanges bank account data on existing clients with dozens of countries to crack down on cross-border tax cheats, court cases such as the UBS dispute with France are highlighting potential legacy issues in Europe.
Italian authorities this year asked Swiss banks to provide information about their Italian business and in 2017 asked their Swiss counterparts for information regarding thousands of Italian citizens with accounts held in Switzerland.
By Silke Koltrowitz, Angelika Gruber, Brenna Hughes Neghaiwi, Reuters, 26 July 2019
Read more at Reuters
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