Swiss Bank Secrecy Alive and Well

Aug 31, 2009

On August 19, the Swiss bank UBS agreed to give the IRS the names and banking data on 5,000 of its U.S. clients. The U.S. government has been putting pressure on UBS for a year in order to get this agreement.

Both sides are happy with the deal. The IRS is making a show of going after some of the biggest cheats. And it is to get money from a few thousand U.S. taxpayers who were the most blatant.

UBS got a good deal as well. First, it can continue to operate in the U.S., where it has 25,000 employees – almost as many as in Switzerland – and many tens of thousands of clients. UBS avoids a trial and billions of dollars in fines. It had clearly been providing wealthy Americans all sorts of illegal ways to avoid taxes. These methods came out at the trial of a UBS official, who had agreed to “tell all” in a show of cooperation with the U.S. justice system.

The whole agreement is little more than a show. UBS has to turn over only about 10% of its 52,000 U.S. clients: Five hundred names are due in three months, 4,500 more at the end of a year. These delays will allow many of them to find a way to escape the IRS.

But even though a few selected government functionaries will learn the financial secrets of some of the wealthy, this won’t put an end to the secrets of wealth and of capitalist affairs.

The big companies have no secrets among themselves. Business methods are secret only from ordinary people, above all, from the workers. Workers are not supposed to know what fortunes have been built from their exploitation.

In order to continue its lucrative work in the U.S., UBS agreed to chip away a little bit at this famous Swiss bank secrecy.

But the bourgeoisie of the world isn’t deceived by this little show. According to the secretary general of the Association of Swiss Private Bankers, far from fleeing the country, more funds of the wealthy are arriving every day.