US inquiry targets UBS banker visits

United States authorities are targeting client visits by Swiss-based bankers from UBS in their efforts to identify US citizens with accounts at the bank who may have evaded tax. American tax authorities want to force UBS to disclose the identity of an estimated 52,000 US holders of secret Swiss accounts suspected of dodging taxes, even though this breaches Swiss bank secrecy laws. A possible compromise involving the names of account-holders visited by Swiss bankers would identify about 10,000 people, Swiss weekly Sonntags-Zeitung said. A UBS spokesman declined to comment, noting the negotiations were a matter for the two governments. A Swiss Justice Department spokesman said the two sides had agreed not to comment while negotiations continued. A trial against UBS had been scheduled to start in Miami on July 13, but Presiding Judge Alan Gold agreed to delay it until August 3 to allow time for a settlement. On Friday a source familiar with the situation said talks between Switzerland and the US to end the tax row could stretch beyond the August 3 deadline. A status call between Gold and lawyers from UBS and the US Internal Revenue Service on July 29 could be an opportunity for an announcement of a delay. A meeting between Swiss Finance Minister Micheline Calmy-Rey and US Secretary of State Hillary Clinton is also scheduled on July 31. The challenge for the two sides is to find a way for Switzerland to hand over enough information to satisfy the US tax authorities without infringing Switzerland's strict laws protecting banking secrecy. Sonntags-Zeitung, citing a US source familiar with the negotiations, said one solution would be to draw on the existing double taxation agreement between Switzerland and the US, which allows Swiss authorities to provide official assistance to Washington to help in a criminal investigation. It said the US Justice Department would seek the names of all US customers of UBS visited by bankers from Switzerland between 2001 and 2007. UBS's US offshore business employed around 60 customer advisors in Switzerland, the paper said. According to a US Senate Committee report last year, each of these advisors visited the US up to three times a year, meeting about four customers a day on a trip lasting up to three weeks, resulting in about 10,000 customer contacts a year. Since UBS has already admitted that its efforts to solicit offshore business broke US law, the American authorities could demand this information without infringing Swiss banking secrecy, which would not be the case if they simply asked for the names of account-holders without any justified suspicion. Another Swiss paper, Sonntag, said Andreas Rued, a lawyer representing eight clients, would sue for compensation if Switzerland's top court found the Swiss government acted illegally in ordering UBS to hand over those names. Rued could not be reached for comment. In another report, sources said that UBS has hired Bank of America-Merrill Lynch banker Keith Magnus to head the Swiss bank's investment banking business in Singapore and Malaysia. Magnus has been head of BofA-Merrill Lynch's investment banking business in Singapore and Malaysia since early 2007. "UBS has hired Keith Magnus as head of investment banking business Singapore and Malaysia," one of the sources said. Keep up with the latest business news from the region with the Emirates Business 24|7 daily newsletter. To subscribe to the newsletter, please click here .