Overseas banks are “Al Capone safe houses” for U.S. clients

On a conference call, Sen. Carl Levin (D-Mich.), Chairman of the Senate Armed Services, and Sen. Norm Coleman (R-Minn.), Chairman of the Senate Homeland Security Committee’s Permanent Investigations Subcommittee, explained the “Stop Tax Haven Abuse Act” that will crack down on companies and banks evading tax responsibilities overseas.

The Union Bank of Switzerland (UBS), the word’s largest manager of private wealth assets, and the Liechtenstein Global Trust (LGT) were the two banks highlighted during the conference call. Sen. Levin said that UBS and LGT are not the only banks shielding American investors from paying taxes overseas. UBS has 19,000 accounts with U.S. clients in Switzerland, which are valued at $18 billion.

Sen. Levin said that the secretive ways of these banks has not only helped protect their clients from being exposed, but it has also helped the banks themselves. The bill would break through the secrecy by “penalizing banks that impede US tax enforcement, barring them from doing business in the U.S., [and] by terminating them from the qualified intermediary program (QI) so they have to disclose all of their clients not just a limited number that they now have to disclose,” Sen. Levin said.

Sen. Coleman said that the Senate could ask for an audit, but the fact is that the banks already have the information about American clients who are evading taxes overseas. Evidence shows that some of the top executives of these American companies have not only known about the banks’ actions, but they have approved them, Sen. Levin said.