Switzerland threatens to block UBS data

The Swiss government has threatened to prevent banking giant UBS from releasing customer information to US tax authorities by seizing the data, documents published yesterday showed.

"The government of Switzerland will use its legal authority to ensure that the bank cannot be pressured to transmit the information illegally," said the Swiss government in a filing to a US District Court in Miami.

This includes "if necessary by issuing an order taking effective control of the data at UBS that is the subject of the summons and expressly prohibiting UBS from attempting to comply" with the US authorities, added the government.

US authorities are seeking to force the Swiss bank to release details of 52,000 US taxpayers suspected of holding offshore accounts by UBS to avoid paying taxes to the US government.

The bank has argued that it cannot comply with the demand as such a move would mean violating Swiss banking secrecy law, and could therefore make it liable for prosecution in Switzerland.

In its court filing, the Swiss government backed up UBS's claim, and stressed that it is ready to intervene if necessary.

"It is hoped that it will be unnecessary for the government of Switzerland to take the extraordinary action of issuing an order to seize the information at issue, but such an action should be expected if the IRS (Internal Revenue Service) continues to pressure UBS to violate Swiss law," said the government.