A recent case involving the giant Swiss bank UBS and a German client highlights why you should never trust banks with your precious metal. It also shows that Swiss banking discretion and secrecy is largely a thing of the past.
The case centres around a client who was holding 299 ounces of gold, worth around $400,000 with UBS. He deposited the gold with the bank between 2003 and 2007.
In 2014 he asked for the return of his gold. UBS refused to hand it over until the customer provided proof that he had paid tax on the funds in Germany.
The customer refused to provide the proof and UBS terminated the banking relationship. The customer was forced to take UBS to court in Switzerland.
Now 5 years later he still doesn’t have his gold back.
The Swiss court in Aargau initially decided in favour of UBS last year saying that “a dubious business relationship should be assumed” because the customer refused to sign the tax form. The customer appealed against the verdict.
The appeal court in Lausanne overturned the decision of the Court in Aargau and stated that “the Swiss money laundering law is not violated in delivery of the gold”
Even with this verdict the customer still doesn’t have his gold. The judges passed the case back to the lower court to decide how the case should be handled according to German law.
This case shows that Switzerland has long lost it’s attraction as a money paradise.
Had this UBS customer been following our advice he would have known to store his gold in a non bank facility. He would also know not to have accounts under his own name.
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