UBS offshore services off limits to US citizens

UBS is to stop providing offshore banking services to American citizens as the latest development of its continuing involvement in the US government's $20bn (£10bn) tax-avoidance investigation into the bank's former operations.

The Swiss bank, which has already closed down its US offshore banking business, went a step further and said that it would no long allow bankers from Switzerland or elsewhere in the world to travel to the US to meet clients on banking or securities matters.

The bank has also agreed to work with the US government to identify American clients who may have been involved in defrauding the Internal Revenue Service (IRS).

That decision follows an earlier ruling by a Florida judge to give the IRS permission to serve legal papers on the bank to attempt to force it to hand over the names of up to 20,000 US clients.
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The IRS, in tandem with the US Department of Justice, is leading an investigation into tax avoidance among US clients of UBS's offshore unit from 2000-2007.

As part of the case, former UBS banker Bradley Birkenfeld, who has pleaded guilty to helping a billionaire hide $200m in assets from the IRS, estimated that the offshore unit helped to conceal $20bn on behalf of wealthy Americans.

Mark Branson, UBS Global Wealth Management's chief financial officer, yesterday revealed the change of tack during a US Senate hearing on the issue of tax avoidance.

He said that while UBS is winding down its offshore business for US citizens, there will be "no new accounts opened".

The hearing, chaired by Senator Carl Levin, heard from a report that estimates tax evasion is costing the US a total of $100bn each year in unrecovered taxes.

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UBS offshore services off limits to US citizens