The Swiss government announced yesterday it would seize UBS banking records rather than allow the US government to access the identities of 52,000 American UBS account holders, who include wealthy families.
The US Department of Justice is seeking the list of names in an attempt to crack down on tax evasion, but the Swiss government has said revealing the names violates Swiss banking laws. According to court papers released yesterday, the Swiss government "will use its legal authority to ensure that the bank cannot be pressured to transmit the information illegally, including if necessary by issuing an order taking effective control of the data at UBS that is the subject of the summons."
The Department of Justice has until 12 July to reply, at which point it will have to state how far it intends to pursue its request for the list of names.
This is the latest development in an ongoing battle. The US government sued UBS in February, demanding it hand over the names of US taxpayers who hold offshore accounts in Switzerland.
The order came a day after the Swiss bank agreed to pay $780 million in fees and handover 250 names to the Internal Revenue Service after the bank admitted to helping taxpayers hide money. This was in exchange for UBS avoiding prosecution over their conduct.