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Banks

UBS to stop offshore banking for U.S. residents

WASHINGTON (Reuters) - Swiss bank UBS AG will discontinue offshore banking and securities services to U.S. residents through its branches, a UBS executive said on Thursday at a congressional hearing on offshore tax havens.

The logo of Swiss bank UBS is seen on a building in Zurich July 8, 2008. REUTERS/Arnd Wiegmann

Mark Branson, chief financial officer for UBS Global Wealth Management and Business Banking, told a Senate subcommittee the bank was also working with the U.S. government to identify U.S. clients who may have engaged in tax fraud.

“Client identity is generally protected from disclosure under Swiss law,” Branson said.

But those protections do not apply in connection with an investigation of tax fraud and when requests are presented to the Swiss government through legal channels, he said.

Branson said that, while UBS is winding down the business of providing offshore banking and securities services to U.S. residents, there will be “no new accounts opened.”

He said client advisers based in Switzerland will not be allowed to travel to the United States “for the purpose of meeting” with U.S. clients.

The hearing came after a six-month investigation by the Senate Permanent Subcommittee on Investigations into tax practices by UBS and LGT Bank of Liechtenstein.

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The probe found the banks helped U.S. clients avoid taxes through complex offshore structures to hide assets.

Subcommittee Chairman Sen. Carl Levin, a Democrat from Michigan, said he was surprised by UBS’ announcement.

Levin said he hoped it would serve as an impetus for other banks.

“We can’t get every bank in front of us to do what they did,” he told reporters after the hearing.

Reporting by Rachelle Younglai; Editing by Andre Grenon

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