Per this articleSwiss bank UBS has agreed to pay a **780 million dollar fine **to the US and divulge a very limited number of their clients, but is defying any further requests for client lists or assets.
As a practical matter what power does the US have to compel UBS to divulge all its clients? Can UBS actually say “no” to the US government and still cater to US clients? What are the options for the government to get them to comply?
I’m not sure if the U.S. can do anything besides pressure them diplomatically. It seems like the rest of the EU has similar concerns. This is kinda like when all those offshore internet gambling sites popped up. The government couldn’t shut them down directly, so they made it illegal for banks to approve electronic transactions payable to offshore sites, which did the job indirectly. Maybe they’ll try to craft similar legislation for this, or perhaps the fear of millions of dollars in accounts being lost through legislation will force UBS to bend a little.
The Unlawful Internet Gambling Enforcement Act of 2006 (UIGEA) caused only a short-lived shake up. A few sites banned USA players but other sites quickly instituted some work-arounds and gladly accepted them. As I type this, PokerStars has 149,577 players … but it is before noon here … they will hit 200,000 as more American players come online later this evening.
I suspect the UBS thing will accomplish much the same; a few scapegoats sacrificed and then business as usual.
It really depends on how much the US cares. They could make it illegal for any person or organization doing any business whatsoever in the US to do any business with UBS anywhere via any method. UBS would shut down forever within hours.
But that’d be just a tad hostile, and more over the top than we’ve treated the Iranians.
Odds are, we’ll get the fudge we’ve got. UBS got slapped, the US won a PR victory, at least in the populist press, and life goes on for everyone.
UBS has huge banking and brokerage concerns operating in the US. They acquired American broker Paine-Webber many years ago. If UBS becomes too recalcitrant, they could find their various American securities licenses and banking charters revoked.
isn’t secrcy Switzerland’s big draw in banking? Why else would depositors accept lower returns?
If the swiss no longer offer complete secrecy, the 3rd-World dictators, narco lords, and mafia bosses have a huge incentive to move their money elsewhere-like Andorra.
Yeah, but how many of those players are playing money games, and how many are American?
I’m not an expert in these matters, but I thought that another incentive was that Switzerland has a very stable government and a very stable currency.
Just doing a random click on a mid-limit $10/$20 limit Hold 'em game the players are from: Great Falls, Bellevue, Forest Hill, Standard, Nijmegen, Melbourne, Richmond, Sarnia, Lincoln, and Fullerton. Looks like 6 out of 10 (maybe 7, don’t know where Standard might be).
And it not yet American Prime Time for poker. Most people are still at work. All the sites pick up substantially after 5 or 6 PM Eastern Time. Nearly all the major online tournaments are timed for the USA.
Flip through the TV channels and odds are you will see a poker game or two … and many of the American players will be wearing online logos … and many of those players are part owners of the sites.
Other than the few operators who paniced and pulled out of the American market online poker was not hurt at all by the government’s attempt to stop it. It continues to grow.
Even if the Swiss totally cave, which I doubt will happen, there will be someone else ready, willing and able to take up the slack in such a lucrative business … and the political talking head grandstanders will have had their day in front of the TV cameras, protecting the children and taxpaying Americans.
Looking at Pokerstars’ FAQ, it seems they still take Visa and Mastercard as well as cashiers checks and money orders.
Like most of the other online poker rooms, Pokerstars has separate applications for its real- and free-money games. Download your client from Pokerstars.net and you get free-money games. Download it from Pokerstars.com and you get real-money games. Presumably, Turble was only looking at how many people were logged into PS.com.
They do have credit cards elsewhere in the world.
Right, I only look at the .com site.
The .net came about when the TV network lawyers felt there might be some risk in carrying ads for gambling sites. Within hours the .net (This is not a gambling website) versions were launched. Note that you can still play Play Money games by signing up on .com and you can still open a Real Money account if you signed up on .net … all players end up on the same game servers. Those who originally signed up on .net have a little white star by their player icon.
RE: Credit cards … I suggest that Visa and such do not put a great deal of effort into attempting to determine who is actually receiving all that money … they are in business to do business. Credit cards actually mostly continued to work right along, with only some people having to get a card from a different bank or buy a prepaid card at the convenience store.
Note also that the UIGEA specifically spells out that the person playing the game or making a deposit is not committing a crime. The law applies only to banking and money transfer institutions.
In sum, the whole thing was, if not a total farce devised only to deceive certain voters, totally ineffective at achieving the stated goals … much like the current UBS situation. Tax fraud is a crime but having money in a foreign bank account is not. Bashing the rich is very popular amongst politicians right now and a few will be sacrificed, but in the long-run the rich and powerful are not likely to take any serious actions truly designed to change their status.
I have to agree with you.
As an aside, and at the risk of hijacking the thread, can anyone explain to me a legitimate purpose for Swiss-style banking laws? I suppose privacy in-and-of itself is a worthy purpose, but aside from that I can only think of bad uses for such laws. It doesn’t seem fair to me that a large segment of the Swiss economy can exist by basically skimming off money that other countries’ are entitled to, whether it be tax income or the proceeds of illegal activities.
There is considerable international pressure on all the countries with outrageous banking secrecy laws to recognize that they are basically a haven for illegal drug money, smuggling, and various other ill-gotten gains. Several of the Caribbean tax havens will now reveal information under specific circumstances (e.g., if asked by government authorities from other countries.) The Swiss banks are fighting a losing battle against the entire international community.