Switzerland files a petition calling U.S.’ John Doe summons on UBS unprecedented

This week Switzerland filed a petition in a federal court filing in Miami, where the U.S. Internal Revenue Service is seeking to force UBS to reveal the identities of 52,000 Americans suspected of using accounts at the bank to hide about $14.8 billion of assets and evade U.S. taxes. The petition urged the U.S. court to decline demands of IRS on the grounds the disclosure would violate Swiss sovereignty and the international law.

Earlier similar filing was submitted by the UBS itself where the bank said the exchange of the financial information should take place through the proper international legal treaties but not through the courts.

Swiss government said that IRS’ employing a John Doe summons is unprecedented and risked disrupting "the careful balance between the U.S. interest in receiving tax related information from Switzerland and the Swiss interest in preserving its long tradition of financial privacy." If a court enforces its orders on UBS it means that such court substitutes Swiss authority and undermines the state independence, said the government filing.

Last weekend Switzerland asked the U.S. to stop prosecuting UBS and to try to settle the issue through a new tax accord. Negotiations on the new agreement began on Tuesday this week and the Swiss government warned the U.S. State Department that the threatened enforcement of the summons against UBS could interfere those negotiations.