In response to my blog entry (July 3), an obviously knowledgeable reader makes some interesting predictions about what may happen next, to wit: For the Swiss I believe the issue will be settled more by the intelligent application of technicalities and pragmatism than 'guts'. If, for example, the IRS serves the summons in Miami, the UBS staff will point out that they are a completely independent subsidiary and have nothing to do with records kept in Switzerland. If the IRS attempts to serve the summons in Swtzerland, the staff will point out they are governed by Swiss law, not U.S. law. No Proof for MLAT In Switzerland the authorities also will point out that not only does the summons have no standing there, the IRS attorney who drafted the summons recognized in writing that the IRS could not employ the Swiss-U.S. Mutual Legal Assistance Treaty (MALT) because they have no specific evidence regarding tax fraud. Moreover, the Swiss government understands that if they allow thousands of clients outside of the framework of international and Swiss law to be betrayed, then their banking industry will be irreparably harmed. Who will be knocking on their door next without proper evidence, the EU perhaps? In addition, very affluent, betrayed clients will not be happy folks. They will look to civil and criminal prosecution of UBS staff and management that enabled their prosecution by the IRS for tax fraud, a very serious crime in both Switze ...
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