Yesterday, UBS, the Swiss banking giant, disclosed that it has been ordered, by the country's tax authority, the Swiss Federal Tax Administration (SFTA), to share its account information with tax regulators in France. The data involves current, as well as former, UBS clients.
Reportedly, the bank expressed its concerns about the legal basis for the release of its clients' information, and admitted that it notified affected customers, concerning their appellate and administrative rights, under Swiss law. Though Switzerland and France technically do have a mutual assistance treaty, Swiss cooperation, in the past, has been poor to nonexistent. Is this about to change ?
The French judiciary has been investigating the extent to which UBS has been assisting affluent French nationals secrete their wealth from their taxman. Did Switzerland decide to cooperate, to avoid potentially negative publicity, such as its sustained in its $780 civil settlement with the United States ? We cannot say, but this new cooperation could be a sign that cracks are appearing in the Chinese wall that Switzerland's vaunted bank secrecy laws have constructed around its financial institutions.