This could get nasty

Uncle Sam doesn’t like the fact that UBS has sold its services as a facilitator of tax efficiency to US tax payers. Or to put it another way: it has allowed US citixens to hide behind the cloak of confidentiality provided by the Swiss banking rules.

So the US started investigating UBS and then it litigated, demanding that UBS should hand over the names and addresses of 52,000 US tax payers who held money on deposit at the bank. Normally that would be enough for a bank to hand over the data. Client agreements would normally allow banks to hand over confidential information if required to do so by a court or governmental authority. But in Switzerland it isn't so easy. They have banking laws that protect the identity of investors.

Swiss bank secrecy laws do not give an absolute anonymity. The protection given to depositors under Swiss law is similar to doctor-patient or lawyer-client confidentiality. In practice all bank accounts are linked to an identified individual, and a prosecutor or judge may issue a "lifting order" to access to information relevant to criminal investigations.

However, the Swiss government has now entered the battle by saying it would forbid the bank from handing over confidential client information even if the US courts required it, adding that it would even confiscate the data if necessary.

Now that is an interesting idea. How does a government confiscate the identity of a bank depositor? And if they do, how does the account holder get their money back?