UBS has tried to draw a line under its upheavals during the global credit crisis, acknowledging serious errors but declining again to take legal action against former top managers.
In a 69-page “transparency report” prompted by a Swiss parliamentary committee this year, UBS reviewed the causes of its writedowns on toxic securities and its separate bruising crisis prompted by private bankers helping rich American clients to evade tax. “What happened should not have been allowed to happen,” said Kaspar Villiger, chairman.
In wealth management, UBS ascribed its problems to inadequate compliance. While measures were taken to improve compliance in US cross-border business, “such measures were implemented in a manner that was insufficiently rigorous, rapid or complete”.
Bluntly this is not good enough. Far from it. Switzerland enjoys fifth position on the Corruption Perceptions Index. But there is one of its biggest banks refusing to prosecute deliberate and sustained systemic corruption. I hope Switzerland drops to the bottom of the list next year as a result.
And that the officials are instead subject to prosecution in the USA.
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1. It is not the role of the bank to prosecute its employees, but the state authorities.
2. Do you have any particular Swiss criminal statute in mind? Retrospective legislation is generally frowned upon, retrospective criminal legislation more so.
@Alex
I strongly suspect that Switzerland has a crime of handling stolen money and tax evaded funds are that
And of course a bank does not prosecute anyone – but it can report a crime
Just to let you know Switzerland prosecutes bankers!!!! Sorry, my zynisme ….
The Swiss Whistleblower Rudolf Elmer will be prosecuted on 19th January 2011 due to the fact he violated Swiss Bank Secrecy and Industrial Secrecy of Julius Baer when disclosing the offshore abuse in the Cayman Islands using Cayman data. Supposingly, Swiss Bank Secrecy protects also the data in the Cayman Islands according to the prosecutor office of Zurich. The very same prosecutor office which decided not to investigated the UBS Management.
I believe that is another reason to drop to the lowest level on the Corruption Perception Index!
Rudolf Elmer
I am afraid that you are the only person I now who thinks that interest that has not been declared in a tax return amounts to stolen funds for the purposes of enforcing any criminal law or that any banker who provides such an account commits an offence money laundering.
The non-declarer is clearly guilty of understating his taxable income but that doesn’t make the person who provides him with the interest any more guilty than one of your clients would be if you underdeclared your income.
I would have thought you would have come up with something more interesting such as conspiring to defraud the US Treasury or something similar, which would be much more likely to give rise to a prosecution if provable, but probably much harder to prove.
@Rudolf Elmer
I am well aware of your predicament and the gross injustice that is being perpetrated by the Swiss authorities in prosecuting you for an alleged crime did not take place anywhere within their jurisdiction or domain.
If you want clear indication of the corruption of the Swiss government, then their action against you is the best indicator there is.
And it also makes clear that they do believe they have the capacity to prosecute, and are deliberately refusing to do so against those who have openly and blatantly promoted their own self interests by abusing the law, whether within Switzerland or elsewhere. If, as they seem to be saying in your case, they have jurisdiction with regard to actions that take place outside Switzerland, then there is no doubt whatsoever that the list of those who they really should be prosecuting is very long indeed, and you would still not be on it.
@Alex
The FATF makes clear that the handling of money laundered funds is unacceptable in any bank anywhere in the world
Obtaining funds by criminal deception is money-laundering. The criminal deception does not have to take place in the jurisdiction where the account is maintained. It can take place anywhere. If that were not the case then there would be no prospect of international cooperation on the prosecution of money-laundering. As such, bankers everywhere have to be acutely aware of their responsibility to check that their clients do indeed meet their obligation to pay their tax liabilities in that state where they have an obligation to pay them. If they do not then they become party to the crime of money-laundering.
Those bankers who deliberately, and knowingly, provide secrecy to ensure that a person using their facility can hide their liability from disclosure in another state are, in my opinion, de facto participants in that crime. That seems to me glaringly obvious under the principles of money-laundering regulation. I can assure you I am not the only person who thinks so.
But you, of course, seem to seek to exonerate crime on every occasion and refuse to recognise that this is a necessary condition for the operation of a safe, legal, ethical and sustainable banking system. Why is that?
On the contrary, I don’t seek to exonerate anybody of any criminal activity. Countries lay down laws stating what is illegal and what is not and we expect them to prosecute when the law is breached and not to try prosecute when the law is not. The law may not always be perfectly aligned with ethics or morality but the law is what it is and not necessarily what you would like it to be.
Funds that are legally owned and placed on deposit are not laundered fuinds. If the deposit earns interest free of deductions then there is no laundering of money. If the depositor fails to declare the interest on the deposit on his tax return then the tax payer is probably guilty of a criminal offence, but provided the banker providing the interest has complied with all necessary regulations they are not guilty of any criminal activity. The responsibility for filing accurate tax returns rests with the depositor not the licensed deposit taker. My bank is not liable for the accuracy of my tax returns and neither is yours.
@Alex
Tell me then why Jersey’s AML manual issue by its authorities says banks in that island should not handle tax evaded funds?
How would they know of they did not ask?
And if they don’t ask aren’t they automatically in breach?
Maybe, but those are Jersey’s rules or laws. My bank doesn’t ask me whther I have declared the interest on my bank accounts. I don’t think that puts them in breach of any laws.