Page last updated at 11:41 GMT, Thursday, 17 July 2008 12:41 UK

US lawmakers attack bank secrecy

Sign at Liechtenstein border
Several countries are investigating LGT bank details belonging to their citizens

Senior US and European bankers will appear before US lawmakers later to defend themselves against claims that they helped to promote tax fraud.

The hearings come after a report from a US Senate sub-committee criticising overseas banks for allowing rich Americans to avoid paying taxes.

Swiss bank UBS and Liechtenstein bank LGT, owned by the principality's royal family, were singled out.

The report claims that secrecy laws cost the US $100bn (50bn) a year.

Conducted by a sub-committee of the Senate Homeland Security and Governmental Affairs Committee, the report is part of a wider investigation into offshore tax fraud by US taxpayers.

It alleges that between 2006 and 2007, UBS - Switzerland's biggest bank - and LGT created complex offshore structures for their clients in which they could hide their assets from the Internal Revenue Service (IRS), which collects taxes for the US government.

UBS has an estimated $18bn in 19,000 undisclosed Swiss accounts for US customers, the report disclosed.

UBS would not comment on specific allegations but said that it was cooperating with the Swiss and US authorities over the enquiries, providing details of US customers who are suspected of breaking tax laws.

An LGT spokesman told the Bloomberg news agency that it "firmly rejects any allegations of having assisted in any such illegal practices".

A number of countries are investigating tax evasion related to Liechtenstein after German authorities obtained data on suspected tax cheats with bank accounts there.


SEE ALSO
Q&A: Liechtenstein and tax evasion
25 Feb 08 |  Business
UK in Liechtenstein tax data deal
24 Feb 08 |  Business
Deutsche Post boss in tax probe
14 Feb 08 |  Business
Country profile: Liechtenstein
30 Nov 07 |  Country profiles
Tax credit to boost UBS results
04 Jul 08 |  Business

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