UBS: US probe 'ignores Swiss sovereignty'

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(Agencies)
Updated: 2009-02-23 16:45

NEW YORK -- Banking giant UBS has accused the United States government of ignoring Swiss sovereignty and forcing its employees to break the law, as lawyers seek to fend off an IRS fraud probe into the firm.

A pigeon flies above a logo of the Swiss banking giant UBS in Lausanne. [Agencies]

The comments come after the US government filed lawsuit on Thursday to force the firm to disclose the identities of as many as 52,000 US customers who allegedly evaded taxes.

"The IRS petition does not acknowledge these restrictions and instead simply ignores the existence of Swiss law and sovereignty," the firm's lawyers said in a response to the filing.

The US request is part of a long-running battle over banking secrecy in which UBS admitted to tax fraud and provisionally agreed to pay US$780 million in settlement charges.

It is estimated that the accounts contain around US$14.8 billion.

"Disclosing the identities of the account's owners would violate Switzerland's substantial banking privacy laws," the lawyers claimed in a statement presented on Thursday and seen by AFP on Sunday.

"Such violation would expose... employees to substantial prison terms, as well as fines, penalties and other sanctions."

A US government drive to recover an estimated US$1.5 trillion hidden in tax havens overseas has drawn it in to conflict with Switzerland, a country which has fiercely defended its right to act as a tax haven.