UBS Exec Criticizes US Effort To Get Account Data

Levin and Democratic colleagues this week introduced legislation into Congress to crack down on tax havens.

A top UBS AG executive told a U.S. lawmakers on Wednesday that the Swiss bank regrets breaking U.S. tax laws, but criticized U.S. authorities' efforts to obtain information on thousands of bank accounts suspected of being used by American tax dodgers.

"We deeply regret our breaches of U.S. laws," UBS' Mark Branson told a Senate subcommittee hearing into a crackdown on offshore tax havens that has called into question Switzerland's cherished tradition of banking secrecy.

Branson called for a diplomatic resolution of U.S. government efforts to get information from UBS on as many as 52,000 undisclosed accounts sought in a civil lawsuit filed against the bank by the U.S. Internal Revenue Service.

"UBS believes the dispute should be resolved through diplomatic discussions" between the governments of Switzerland and the United States, Branson said, adding that the bank believes it has complied as much as possible with the lawsuit.

"The IRS is attempting to resolve this diplomatic dispute in a courtroom, which is neither productive, nor proper," he said.

Branson's remarks came in prepared testimony to be given to the Senate Permanent Subcommittee on Investigations chaired by Senator Carl Levin, a foe of tax havens estimated to deprive the U.S. government of $100 billion in annual revenues.

"The rest of the world is getting fed up with offshore tax havens that turn a blind eye to tax evasion and allow their financial institutions, lawyers, accountants, and others to profit from tax dodging," Levin said at the hearing.

The subcommittee hearing convened just hours after UBS, the world's largest banker to the rich, announced that Swiss politician Kaspar Villiger will replace Peter Kurer as its chairman. ID:nL427555

Separately, in a speech on Wednesday before a joint session of the U.S. Congress, British Prime Minister Gordon Brown called on world governments to "outlaw offshore tax havens."

UBS ACKNOWLEDGED RESPONSIBILITY

Branson was appearing before Levin's panel for the first time since UBS last month acknowledged responsibility for helping U.S. clients conceal assets from the U.S. government. UBS also agreed to pay a $780 million fine, and to identify some U.S. clients, in a legal deal that resolved criminal fraud charges that it helped wealthy Americans evade taxes.

U.S. authorities, fearing that the agreement might yield very few names, then filed a civil lawsuit against UBS seeking information on as many as 52,000 undeclared accounts.

UBS has said it will fight the lawsuit, arguing that the information sought by the United States is protected by Swiss financial privacy laws. Branson is chief financial officer of UBS Global Wealth Management and Swiss Bank.

Also testifying at the hearing were top officials of the IRS and the Justice Department's tax division.

Levin's subcommittee has been probing offshore tax havens for years, taking aim sometimes at tax havens other than Switzerland, including Liechtenstein and the Cayman Islands.

Branson last testified before Levin in July. In that dramatic session, Branson apologized for UBS' activities and said the bank would cease offering cross-border private banking through its unregulated units to U.S.-domiciled customers.

Levin and Democratic colleagues this week introduced legislation into Congress to crack down on tax havens.

The Obama administration on Tuesday endorsed the bills filed in both the Senate and the House of Representatives.