Posted on June 18, 2012 by Petros Posted in Issues regarding US persons abroad, reductio ad absurdum 24 Comments I introduce a new category of posts, reductio ad absurdum, with a video by a Isaac Brock reader, Wellington. This same Brocker also did the following video: Share this:TwitterFacebookEmailLike this:Like Loading...
These videos are great – Saw the second one awhile back!
On the subject of Switzerland and how hard it is to open a bank account there now, I came across the following last night:
According the woman interviewed, only about 1/4 to 1/3 of all Swiss banks that she contacted (nearly 20 in total) would have anything to do with her at all. In Germany, most banks are now restricting accounts to current and savings accounts. This is a trend that is spreading across Europe and Asia, so as the kind senator in the video implies, most of the 6 million overseas will indeed have to choose soon whether to go back to the US or give up citizenship, since the middle ground of simply wanting to live our lives undisturbed overseas is rapidly vanishing unfortunately…
Yeah I thought it would be useful to post a record of my conversation with the good senator for all to see, although apparently it was all for nought and I don’t believe he’ll be coming around to our view for a while to come. If anyone else wants to pay him a visit, I would say don’t waste your time.
@ Don: Although the videos reference FATCA as if they’re fully implemented, Swiss banks are already taking steps to shut us out and I’ve had the personal experience of being rejected by banks (although I’m a resident here!). I think it’s especially bad in Switzerland at the moment, compared with the rest of the world, and it’s a foretaste of what will happen everywhere else come 2013.
@ Petros: Thanks for posting my videos. Oh and by the way, Isaac Brock rocks!
I have also been booted from an account in Germany and refused one in the UK, so I know what it feels like 🙁
Oh oh, something is wrong here. On my computer there are only blank spaces where the videos are supposed to be. Luckily I have watched them both and I think they are great. Thanks, Wellington. This has really gone too far when people are refused banking services because of the FATCA fiasco.
I restarted my computer but the spaces are still blank on this page and on the home page the only video appearing is the “Don’t Talk to Police” video. This is puzzling.
@ Don: I didn’t realize it was that bad in other European countries yet and I hope you’ve taken steps to reduce your US person exposure (renounce or relinquish). At the end of the day, none of us can count on changing the system and can only change our situation.
@ Em: The videos work fine for me here, but I’m fully expecting they will be censored by Youtube and/or the authorities someday.
I don’t think it’s censorship, just a little glitch somewhere. Would you mind posting the 2 youtube URLs without the http:// so the videos themselves don’t get put into the comment section?
You mean like this: youtube.com/watch?v=ga4jZy1ru0g youtube.com/watch?v=hWa8jnU39r8
@Em Try opening up a different browser. When something doesn’t work in firefox, I open IE explorer or Chrome.
Not exactly, I was hoping the URLs would appear and not the videos themselves, since Petros put them at the top too. I thought leaving off the http:// would do the trick. Also “Americans Abroad 2” came up where #1 should be. Sorry I just don’t know how all this works exactly. Maybe just typing out the URL without copy and pasting it would work. Have you got time to delete your comment? LOL even as I type this I see 2 videos are appearing at the top where the blank spaces were but the same thing has happened. There are two #2’s and no #1.
Has Tertia taken control of IBS today? Can’t blame Phantom because she isn’t out and about yet. 😉
Got a Mac here. I’ll go from Camino to Safari.
I’m on Safari now and looks like all is well. Camino must be having a bad hair day! Also Wellington’s comment does not repost the videos themselves like before. Sorry to be such a pest today. 🙁
My Cantonal Bank Banker told me on Friday that the Swiss Post Bank had just changed their rules and were no longer accepting any new bank accounts for US persons. The Post had been about the last hold out, but they are now also IRS squeelers.
I work in IT at a large Swiss bank and today I had a meeting with my HR representative. They are upset because I will not accept their new “austerity” contract that includes making every one born in my birth year (late 1950’s) or later have to work 2 years longer until retirement. I told him that when I accepted the job the contract specified retirement at 62 and that I would not accept the new conditions.
Anyway, I am sick of the job anyway. The last 10 years have been only compliance work: Sarbanes Oxely, AML (anti-money laundering), Lexidia (legal case tracking), Cosima (Name checking for PEP (politically exposed people), Business Continuity, and our latest piece de resistance: Business Rules Compliance Engine.
You see, these major banks spend a major portion of their IT (and other) budgets on US compliance. Year in and Year out many major IT projects are US Compliance related. I know for a fact that there are hundreds of US tax lawyers living in Zürich in 4 and 5 star hotels on full TDY. Some of these lawyers get paid a thousand dollars and hour or more. It is all about the black hole known as compliance. A good Swiss friend of mine leads up a team doing mostly Email forensics. Their job is to datamine emails and other bank databases in response to US tax inquiries. The work closely with US lawyers staying in fancy hotels like the Dolder.
But the bank pissing millions away every year on compliance is only the minor part of the problem. Since the bailouts in 2008-2009 the bank owes its very existence to the Fed and the crony US banks. Over the last few years there has been a creeping takeover of the entire bank by the US based subsidiary. First it was the entire legal department and its IT applications (the security on the legal database is one of the most stringent in the bank, care to guess why?), then HR and now the entire IT management. This major Swiss bank is now more American the Swiss.
So now the newest IT management team, based out of Stamford Conneticut, has decided that the “industrialiazion” (their words) of IT has to continue. They are broadening the matrix organization to 500 developers in one “pool” and they want to continue the “re-badging” process where bank employees are forced to resign and start working for companies like Wipro and Infosys. This is the kiss of death because these Indian IT companies only want to suck as much application specific knowledge as they can before they let the employee go.
But even worse than all of the above, this large, nominally Swiss, but in reality US, international bank has so little regard for its IT employees that it is cramming them into the “office of the future”. I kid you not. In this new office no IT employee has a fixed desk, but a little filing cabinet on wheels and every morning they are expected to compete with the early risers for a desk. And just as with discount airlines the desks are often over-booked. We are forced into gigantic rooms with a 100 and even more IT employees elbow to elbow talking on phones and discussing arcane IT solutions to some stupid US compliance tax issue. It is simply not to be believed.
Thanks for the inside info — very interesting. I said in a comment elsewhere my suggestions for the IRS would be get the US tax code down to 2000 pages and stop citizenship based taxation. And I don’t care how many job losses would occur in the tax industrial complex. Let them learn how to bake cake. Maybe someone should just blow up the whole matrix and rebuild something much simpler. I realize that would mean you and other IT employees would be out of work at the banks but I would love to see your talents being used to make a better world for people and not the bankers and the US bureaucrats. Maybe I’ll reword something here … Let them learn how to bake bread.
@ ConfederateH: Thank you for the insights into the banking. With so much overhead, regulations and waste how could businesses stay competitive? You can find similar huge expenses and overhead many other places, for example I came to know that, foreign students in the US universities need to pay nearly US$2000/year for health insurance. I got curious and enquired about cost of family insurance and learned it is around US$14K per year for employers and employees. That is 50% more than salary of experienced software programmer in India. The US got to address such waste and regulations to become competitive.
So, of those IT workers how many were Americans, or was it just other nationals doing the work that the IRS created for them? Now the $1000 attorneys in the 5 stars, I bet those are mostly Americans!
BTW… Thanks for the insights. Appreciate you commenting.
@EM: The big Swiss Banks need to be broken up and the American subsidiaries and Investment Banking arms separated from wealth management. It won’t happen because these banks are insolvent and depend on the IRS and SNB for new money to use in speculation and carry trades.
@Bharat: I don’t think these banks are profitable, it is all one giant shell game. The American subsidiary has never made any real money, all its net profits are consumed by lawyers and legal settlements. It has turned into one ponzi scheme managed by over-educated “technocrats” who contribute nothing, follow the latest management fads to cover their asses and take massive amounts of capital out of the system in the form of salaries and bonuses.
@Just Me: Only a small fraction of the IT contractors are American, the largest shares would be Brits and Germans with Indians coming on strong. AFAIK the lawyers are American.
@ConfederateH, aren’t there labor laws in Switzerland that prevent the type of practices that you describe in your last paragraph (the new office)? It seems borderline illegal.
Giving a few clues about my background what you describe is not at all uncommon in financial institutions around the world. I am not sure how to “stop” what is going on at the moment but I will spend my lifetime trying to do so(I am pretty young so I have a lot of years ahead of me). I also believe that much of the current economic problems facing the world economy right now are due to this “corrupt” US centered legal and financial system. So unless there is some “change” to the way things are going the world economy will simply sink deeper into the mud(My prediction is Obama is reelected and is complete failure throughout his second term). I think you really have to break the power of the legal establishment in the US and the Ivy League law schools. I don’t know right now how to “take down” Harvard Law School for example. I am sure there is a way though and I am going to try to find it.
You really need to read the book Liar’s Poker from the 1980s by Michael Lewis. That is when all of “this” started. Everyone afterwards wanted to become a BSD. (Big Swinging Dick pardon my language).
@Tim… Liar’s Poker, my all time favorite. BSD indeed! And ConfederateH, you ought to watch Michael Lewis’s graduation speech too. The Extra Cookie
This is an excerpt from today’s Financial Times on Schumer’s Ex-Pat bill:
“Fortunately for him (Sevarin), Mr Schumer’s proposed bill is not expected to advance amid Republican opposition. Influential conservative anti-tax activist Grover Norquist went as far as comparing it to exit taxes levied by both Nazi Germany and communist East Germany on wealthy citizens who wanted to leave. Others were more measured, but still sceptical. “As usual, the response from the other side of the aisle is a talking point rather than a real solution. The root cause of the problem – an archaic tax code and massive tax burden that incentivises people to do something like this – must be fixed,” said the office of Orrin Hatch, a Republican senator from Utah.”
@ConfederateH About PostFinance in Switzerland, I think that this announcement still applies : http://www.lematin.ch/suisse/Postfinance-serre-la-vis-a-ses-clients-americains/story/11139157
Dual Nationals with Swiss nationality and residents of Switzerland will still be served, anybody have any information to the contrary?
You know you’ve got a scam letter when it begins: “My name is Mr. Matthew Cheetham…”. Mr. Cheetham goes on to say he would like to present me to his bank as the next of kin of a UK man (same last name as mine but definitely NOT a relative) who died 10 years ago without a will, leaving behind an account worth millions of British pounds. Oh, and he offers to work inside his bank to provide the evidence needed to back up my claim to this estate. He does, of course, want a share of the funds when they are released.
I really needed a good laugh today. (BTW, no return mailing address, just a gmail address and a UK phone number listed in the body of the letter.)