The Swiss government announced today that it would not allow UBS to turn over the private information that U.S. authorities have requested on account holders at the bank. According to MarketWatch, Swiss authorities claim that it is illegal for UBS to turn over such information and that they would step in to block such an occurrence.
UBS, long a popular banking institution for foreigners looking to avoid domestic taxation, is stuck in the middle of a legal battle against the U.S. Department of Justice and Internal Revenue Service. The two regulators are looking for account information for those clients of UBS that may have committed tax evasion through their overseas accounts.
Though UBS has already disclosed hundreds of client names to U.S. authorities in order to avoid criminal charges, the Swiss Federal Department of Justice and Police says that such a decision was illegal, and that the agency “prohibits UBS explicitly from handing over client information.”
UBS has paid $780 million in fines, but an impending court battle could prove far costlier. One Swiss newspaper estimated that UBS could pay as much as $4.6 billion to settle the charges.