MercoPress. South Atlantic News Agency

Swiss regulators “violated” the law by handing bank information to the US

UBS last February agreed to pay 780 million US dollars to settle tax dispute

Swiss financial regulator FINMA violated the law by authorising UBS to hand over details of 300 clients to US authorities, a Swiss court has ruled.

On 18 February 2009, FINMA decided to allow UBS to transfer client data to the US to end an investigation into its biggest bank. The decision weakened Switzerland's strict bank secrecy rules.

But the court said that even if FINMA's position was difficult, it should not have allowed the passing on of data.

In February last year, UBS agreed to pay 780 million US dollars to the US government to settle allegations that it had defrauded US tax authorities.

The US had accused the bank of conspiring to create sham accounts to allow US clients to hide their wealth overseas.

“Even though FINMA was in a difficult position because of the threat of charges against UBS, it should not have ordered unilaterally the passing on of data outside of a proper process of a request for official assistance,” Switzerland's Federal Administrative Court said.

FINMA responded in a statement: ”The court is of the opinion that FINMA should not have mandated this data handover alone. If at all FINMA should have asked the federal council (government) to do so.“

Only the Swiss government and the parliament are authorised to allow banking secrecy rules to be lifted by invoking the law of ”constitutional necessity”.