Another article about Swiss banks getting rid of clients (dual-nationals included). Interesting that Raiffeisen already announced this at the beginning of the year (following the acquisition of Wegelin). Many Raiffeisen clients are also “societaires” as the bank is a cooperative institution (similar to a credit union) and I wonder how the bank can exclude people who are not only clients, but shareholders.
http://www.lematin.ch/economie/argentfinances/raiffeisen-separe-clients-americains/story/10424823
I already wrote a response to the article, please everyone do so. Unfortunately there is a limit of 400 characters and you need to sign up somehow (with Facebook for example).
What astounds me is that no one seems to have yet sued or filed criminal charges for discrimination (at least that we have heard).
Banque Coop is also mentioned in this article for closing accounts as well. Oddly enough, their motto is “FAIR BANKING”.
A few years ago, Raiffeisen said that it would continue to offer services to Americans in limited circumstances. Also, the BCV (Banque Cantonale Vaudoise) got rid of clients resident in the US, but did not exclude keeping clients living in Switzerland:
http://archives.24heures.ch/actu/economie/bcv-lache-clients-etablis-sol-americain-2010-09-10
*There are about 6,004 publically traded companies in Canada all of them either on the TSX or TSX Venture
The only 5,400 publically traded companies in the US “on exchange” (There are thousands more off exchange but many of these are boiler rooms). Now I believe the collective 5,400 US publical traded companies have considerably more market cap than their Canadian counterparts and trading volume.
*I really like page 11 with column and row “non US Persons” and “non US Security” with the remarks “Currently out of scope” I like the term “Currently”. What this slideshow clearly shows is there are really only a few nations that count in implementing GATCA the US, Canada, France, the UK, Japan, Hong Kong, China, South Korea, and maybe Australia. Right now the US doesn’t have on board Canada, Australia, China, or South Korea. South Korea is a military protectorate of the US at the end of the day so that leaves Canada, China, and Australia. The real thing is if Canada is the last man standing Bay Street as a last refuge will fill to the brim with all sorts of currupt funds from all over the world trying to avoid GATCA.
@Tim…
Thanks for those. I would still love to see the video of the talking walking FATCA fanatic! 🙂
@Swisspony…
2013 FATCA becomes effective for US institutions.
Accounts opened prior to 1 January 2013 will be considered “pre-existing” at USWAs. USWAs may begin entity account due diligence at any time.
FATCA-compliant onboarding processes/systems must be operational.
Foreign Financial Institutions (FFIs) electronic application process expected to begin.
Grandfathered obligations. FATCA withholding not required on obligations outstanding on 1 January 2013 unless materially modified.
Raiffeisen is the third largest banking group in Switzerland based on assets, behind the much larger UBS and Credit Suisse, but is considered to be the largest retail bank in the country. Approx. 1,000 US Persons are impacted by the decision to terminate banking relationships with anyone who must file tax returns in the US, according to the news story below.
– As an opinion, I think Raiffeisen is focused on Swiss non-metropolitan areas, where I suspect fewer Americans live, and therefore they only had around 1,000 American customers, or 0.03% of the bank’s assets.
http://www.tagesschau.sf.tv/Nachrichten/Archiv/2012/07/21/Wirtschaft/Raiffeisen-trennt-sich-von-US-Kunden
On the topic of discrimination, reader comment no. 6 says:
“Racism?
How long will it take before the reproach of discrimination, in particular, of racism is made, or is that only valid where the political left sees it. The behavior in this question is a scandal for the Swiss financial center.”
I spoke today with the local Raiffeisen branch about refinancing my mortgage with Raiffeisen. The customer service representative said that such could not be done, even though I am a Swiss citizen, since the US government requires me to file taxes. I then went to the U.S. Department of Housing and Urban Development to file a complaint on Housing Discrimination, but their online form doesn’t have a place where I can enter in my country. I just noticed now that the state section allows one to select “Not US”. So, this evening I’ll file a complaint with them: https://www5.hud.gov/Hud903/main/pagHUD903Form.jsp
My wife and I hold one of the 1000 US person accounts with Raiffeisen. By our reckoning, 1000 individuals, couples or families, even if they represent “only” 0.03 % of Raiffeisen’s total customers, is a large number.
When my family and I moved to Switzerland in 1991 we opened a current account with UBS. UBS was our neighborhood bank
for 17 years. My salary was deposited into it, we kept savings in it and made withdrawals from it to cover daily expenses. In 2008,
everything changed. A letter from UBS informed us that they were moving our account to a different location to be consolidated with other American accounts. We were told that we could maintain the account, but that investment and other banking options would be severely curtailed (we had never used those options). One UBS account manager, and one only, could speak to us concerning our UBS account. The policy continues to this day.
We were not happy with this decision by UBS. Nor did we agree with its questionable ethical practices in the US which were the cause of their difficulty with the US in the first place. We opened a new current account with Raiffeisen, thinking that it was sufficiently regional and distant from the US, and placed most of our savings in that account. This transfer, from one neighborhood bank to another, resulted in the artifical doubling of the amounts indicated on our FBAR report (maximum yearly amount in each account). Even though it had no incidence on our US taxes, we felt that it was llogical and unfair. We asked ourselves «what are they going to do with this information?»
When I retired in 2010, I arranged to have my monthly pension, paid in Swiss francs, deposited into our Raiffeisen account. We asked that our account be moved from Bern, our former residence, to Geneva, closer to our new residence in France. We were informed that we could not move our account because we were US citizens.
In 2012 we received a letter from Raiffeisen that contained a US IRS form W-9 and a waiver letter (lifting bank secrecy for our account) for our signature. If we did not sign them, we would be
considered recalcitrant, and our account would be closed. We reluctantly signed the forms, and wrote a letter to the CEO of Raiffeisen to convey our disapproval, not only of the bank’s actions, but also of the underlying policies decided by the US and their consequences on law-abiding US citizens who chose to live and work in another country. We indicated that we had nothing
to hide, that we were in full compliance with the IRS, meaning that we had completed, to the best of our and our accountant’s ability, our yearly US tax forms, FBAR reports and even the new FATCA 8938, but that we did not believe it was right for Raiffeisen to become an IRS collection agent.
We received a response from Raiffeisen, containing an internal FATCA information. It indicated, among other things, that Raiffeisen had not yet made a decision on how it would react with
respect to its accounts held by US persons.
Regarding the 21 July articles informing the world that Raiffeisen was closing its accounts held by US persons, the IBS post was correct in adding the word (again). There had been a similar
announcement made in the press earlier in the year. At that time I tried to contact Raiffeisen but no one would speak to me. I assumed that, since the number of accounts mentioned was so small, and since we had received no notification, it must have referred to accounts by US persons residing in the US.
We have not received any further communication from Raiffeisen regarding the possible closing of our account, and until we do, we will not take any action.
If and when it informs us, my initial thinking is to politely say no, we do not want to close the account because my retirement pension is deposited into that account, and see what happens from there. Without suing or hiring a lawyer, we want to see how the bank responds to us. I feel that we are in a pretty good position (we are normal people, neither rich nor poor; we are law-abiding; we pay our taxes in France and report our «Swiss» accounts; we are compliant – as much as that is possible – with the IRS and report our «Swiss» accounts), and I am sure Raiffeisen will need to be careful in how it proceeds. It may take some time.
Our renunciation appointment is in December in Paris, five months away. If Raiffeisen were to insist on closing our account, and if we had no recourse, then it would be interesting to see how
it would react to an account holder with a CLN (or one on its way).
It amazes me to think that all of this fuss can be made over a current account that allows me to receive my monthly retirement pension and make withdrawals for living expenses. Then again, I am not really surprised, given all that we know.
*I had some formatting difficulties with my post above. Apologies.
@ Lord Jim: Thank you Lord Jim for your comment. You realize the IRS finds “anecdotal” reports such as yours, even when presented directly, to be of little importance — not at all worrisome. It’s like a high speed train is unaffected by a gnat on the track. However, I and everyone at IBS and hopefully a growing number of enlightened folks find your situation to be very worrisome indeed. Everyday we see more canaries in the mine shaft swooning and falling off their perches. We wonder who will be the next to get that dreaded bank notice and then discover his/her once friendly bank manager has suddenly become uncommunicative. May your renunciation go smoothly and the CLN come quickly afterwards.
@Lord Jim So they (Raiffeisen) said that they would close the account if you did not fill out the W-4 form but they still might close it? Do not back down, never give them permission to close the account.
If you had refused to fill out the W-4 form and they had closed the account, they would have been in violation of not only Art 261bis CPS (discrimination) but also Art 271 (Illegal acts for a foreign state).
In addition to refusing to allow account closure and threatening the bank with discrimination litigation if they do not open accounts and refinance mortgages, it would be useful to cite the current framework being negotiated with Switzerland which would not require the closing of recalcitrant holder’s accounts:
http://www.treasury.gov/press-center/press-releases/Documents/FATCA%20Joint%20Statement%20US-Switzerland.pdf
In addition, as a result of the Cooperation Agreement, Swiss financial institutions would not be required to:
1. Terminate the account of a recalcitrant account holder;
2. Impose foreign passthru payment withholding on payments to recalcitrant account holders, or to other financial institutions in Switzerland, or in another jurisdiction with which the United States has in effect either an agreement for an intergovern-mental approach to FATCA implementation, or an agreement for intergovernmen-tal cooperation to facilitate FATCA implementation.
Of course under the agreement, the Swiss government would be required to share information with the IRS, but appeals against the data transfer could still be lodged by recalcitrants (as they have been done in the past with some success).
I still say, fight at every juncture. Tell them NO! Write the bank registered letters citing the law and constitutions, complain to the prosecutors’ office. Tell the bank you will organize a picket against them as a racist institution. If you back down and negotiate they will swindle you. No negotiation. Going to another bank is not an option: if one bank shuts us out, others will eventually too. Fight for every inch of ground! We must stop the momentum or we will end up being Kristalnachted. NEVER AGAIN!
If they say “it is the law” then here is some counterpoint 1. that is bullshit because such treatment is unconstitutional. 2. If they say they have to do this because they are accepting US jurisdiction of internal revenue code and fubar and fatcrap, then that means the equal credit-oppourtunity act, anti-housing discrimination acts of the US apply too. 3. The Patriot Act defines just about everything (including acts against US Citizens abroad) as terrorism. If the bank accepts the jurisdiction of the US, then they are terrorists for unlawfully discriminating against you.
American is not a “race”, nor is it an ethnicity.
Sorry Dan, I don’t agree with you. American is an ethnicity.
eth·nic·i·ty
noun eth-ˈni-sə-tē
plural eth·nic·i·ties
Definition of ETHNICITY
1
: ethnic quality or affiliation <aspects of ethnicity>
2
: a particular ethnic affiliation or group <students of diverse ethnicities>
1eth·nic
adj ˈeth-nik
1
: heathen
2
a : of or relating to large groups of people classed according to common racial, national, tribal, religious, linguistic, or cultural origin or background <ethnic minorities> <ethnic enclaves>
(http://www.merriam-webster.com/dictionary/ethnic?show=0&t=1343118329)
ethnie
nf ensemble d’individus unis dans une communauté de langage et de culture et dont les structures économiques et sociales sont proches
(http://dictionnaire.reverso.net/francais-definition/%C3%A9thnie)
RS261bis in German:
“wer eine von ihm angebotene Leistung, die für die Allgemeinheit bestimmt ist, einer Person oder einer Gruppe von Personen wegen ihrer Rasse, Ethnie oder Religion verweigert…”
“Ethnie: Menschengruppe (insbesondere Stamm oder Volk) mit einheitlicher Kultur” [A group of persons … with a unitary culture](http://www.duden.de/rechtschreibung/Ethnie)
We could also argue that “American” denotes a set of ethnies: WASP Americans, Italian-Americans, Irish-Americans, Latino-Americans, African-Americans, Kenyan-Americans, Kenyan-Americans-With-Mothers-From-Kansas (“Barry” Obama) Inarticulate-Texan-Americans (Bushie-poo Jr) and many others. The superset of these ethnies also has its own particular, general cultural charactaristics. For example, we tend to use Sir, Mister and M’am when we don’t know somebody or want to say something formal and insisting. We tend to call even honored business contacts by their first names once we get to know them. Most of us believe in free speech and economic freedom. Even Southerners and Catholics (or other non-Puritains) have their own version of “Yankee Ingenuity” and the Puritain work ethic.
Most of us have been known to eat and to prepare with pride hamburgers, pizza, tex-mex, apple pie, beef and bean chili, or whatever. And our recipies are often distinctively different than the original recipies devised in Hamburg, Italy, Mexico, or wherever.
We have an accent different from that of the British. We say “Jerk” instead of “Wanker”, usually “Tomayto instead of tomaahtoe”, we spell “color” and not “colour”, when we are sick or injured we are “in the hospital” and not “in hospital”.
All these things are cultural aspects that define an ethnie or super-ethnie.
Those that live in Switzerland or Canada are Canadian-Americans or Swiss-Americans, with their own particular cultural traits that may be a combination of various things. I eat fondue and put gruyère on my hamburger and in my homemade burritos, not yellow cheddar. I can eat a curry with so much chili that would make steam come out of average non-US person Swiss’ ears, eyes, nose and mouth. How can you do that they ask? “It is cultural, mon ami”.
The problem is that the banks have gotten wiser! They are dropping clients that are: “…. in den USA steuerpflichtig sind” = people who have an obligation to fill out tax forms for the IRS, which means just about ANYBODY. So in this case, as Dan has pointed out, I don’t think that Article 261 will help anyone in Switzerland
see this article: http://www.tagesschau.sf.tv/Nachrichten/Archiv/2012/07/21/Wirtschaft/Raiffeisen-trennt-sich-von-US-Kunden
Swiss residents are not under the jurisdiction of the US, Swiss citizens in Switzerland even less so (RS291 Art 23). I don’t see how the Swiss government can allow FATCA without a popular vote. The last-in-time rule interpretation by US courts that claims that changes to the IRC supersede previous treaty conditions is a form of arbitrary treatment prohibited under article 9 CFS and the Swiss govenment cannot enforce such without violating article 2 (which requires the government to defend the rights of the people and the independance of the country). Treaties that have the effect of changing the Constitution must be voted by the people (Art 140, 141 CFS). This has not been done for the various treaties and agreements around information-sharing, double taxation “avoidance” (misnomer), FATCA, etc.
Constitution:
Preamble
In the name of Almighty God!
The Swiss People and the Cantons,
mindful of their responsibility towards creation,
resolved to renew their alliance so as to strengthen liberty, democracy, independence
and peace in a spirit of solidarity and openness towards the world,
determined to live together with mutual consideration and respect for their diversity,
conscious of their common achievements and their responsibility towards future
generations,
and in the knowledge that only those who use their freedom remain free, and that the
strength of a people is measured by the well-being of its weakest members;
adopt the following Constitution:
Art. 2 Aims
1 The Swiss Confederation shall protect the liberty and rights of the people and
safeguard the independence and security of the country.
2 It shall promote the common welfare, sustainable development, internal cohesion
and cultural diversity of the country.
3 It shall ensure the greatest possible equality of opportunity among its citizens.
4 It shall be committed to the long term preservation of natural resources and to a
just and peaceful international order.
Art. 140 Mandatory referendum
1 The following must be put to the vote of the People and the Cantons:
a. amendments to the Federal Constitution;
b. accession to organisations for collective security or to supranational communities;
c. emergency federal acts that are not based on a provision of the Constitution
and whose term of validity exceeds one year; such federal acts must be put
to the vote within one year of being passed by the Federal Assembly.
Art. 141 Optional referendum
1 If within 100 days of the official publication of the enactment any 50,000 persons
eligible to vote or any eight Cantons request it, the following shall be submitted to a
vote of the People:82
a. federal acts;
b. emergency federal acts whose term of validity exceeds one year;
c. federal decrees, provided the Constitution or an act so requires;
d. international treaties that:
1. are of unlimited duration and may not be terminated;
2. provide for accession to an international organisation;
3.83 contain important legislative provisions or whose implementation requires
the enactment of federal legislation.
2 … 84
Art. 141a 85 Implementation of international treaties
1 If the decision on ratification of an international treaty is subject to a mandatory
referendum, the Federal Assembly may incorporate in the decision on ratification the
amendments to the Constitution that provide for the implementation of the treaty.
2 If the decision on ratification of an international treaty is subject to an optional
referendum, the Federal Assembly may incorporate in the decision on ratification the
amendments to the law that provide for the implementation of the treaty
Art. 9 Protection against arbitrary conduct and principle of good faith
Everyone has the right to be treated by state authorities in good faith and in a nonarbitrary manner.
The Swiss government is in open rebellion against the Constitution and the people. This having been said, it seems that the agreement on FATCA application making some concessions on recalcitrants (see above) may be an attempt by the government to come back into favor and right at least some of the wrongs that they have already committed.
*@Jefferson
Don’t worry. We don’t plan to give in so easily or negotiate. Our plan is simply to go slowly, make the bank take the initiative at each step, and document it. This is, at least in my eyes, not like a mortgage or opening a new account. They already have something tangible that is ours – our savings – and they want us to withdraw it. I do not believe that it will be so easy for them to simply throw our money out the front door. I honestly don’t know what they could, or might do if we said we wanted to maintain our account. So let’s see.
Don’t forget that we have received no information directly from Raiffeisen regarding our account. For the moment, there is only an article that appeared in Le Matin. Le Temps (Geneva) has not mentioned it. So it is still only a rumor, like the press item that appeared earlier in the year.
@Lord Jim Are you also cooperative shareholders with Raiffeisen? I seem to remember this was mandatory or strongly suggested when opening an account there. Go to the shareholders meeting or write a letter insisting that the issue be on the agenda for the next meeting. The bank will have no choice but to publish your complaint to all of the shareholders, otherwise they would be violating the regulations for cooperative organizations. Make a motion!
Waiting to see what happens might be ok if you do document every step, but you have to push these people. I have the impression that there are many minnows in Switzerland that are being treated as Swiss nationals when such respond to the question “are you American” with “I am Swiss, and hold the right of bourgeoisie of “. Such a white “lie” is a permissable act of self defence under the penal code (you are omitting information to defend against a worse abuse of your rights) and consistent with RS291 Art 23 (dominant nationality in the case of dual nationality).
Without wanting to sound sexist, negotiate with male bankers, appeal to their responsiblity as part of a sovereign people and as Swiss militiamen (Art58,59 CFS) to protect the sovereignty of the country. Remind them that later, Uncle Sam might come for them too. Better to stand up for us now while there are still people standing, otherwise there will be nobody left except the gestapo and a fearful oppressed, controlled population. F-CA results in Nuremberg-law type regulations. Read my lips: no new Kristalnacht, never again.
Do the Swiss really want to cooperate with a foreign government that passes unconstiutional intolerable acts such as the NDAA (even if presently blocked by brave Judge Katherine)?
*Lord Jim, the Raiffeisen AGB prohibits stateside US citizens from visiting their web page (Canadians in Canada too), but not US citizens in France or Switzerland:
That’s the only thing on the topic that I could find so far.
@swisspinoy This has been the case with many banks for a long time. I don’t know if there are IP filters, but you can get around those by using a proxy server.
It is not illegal to break into your own home.
@Lord Jim “…I do not believe that it will be so easy for them to simply throw our money out the front door.”
From my experience that can happen faster than you can say „Chuchichaeschtli“ My parents returned from the US to Switzerland after my father’s retirement and 2 days before last Christmas he received a letter from the ZKB that said the will be closing his account by the end of February and that he should give then the details of a new bank in which they could deposit the money.
Please note that these were normal savings accounts that he has had for more that 40 years! They also said that if they did not receive any information on where to deposit the money that they would close the accounts and write a bank cheque for the total sum which would be deposited at the front desk for them to pick up!
Only after we called the bank to ask if the new account was allowed to be one that is held jointly by both my parents did the person on the other end say that “Oh, This must be a mistake! We must still have a US address form you on our files! If you are permanently residing in Switzerland then please disregard our letter” So far we have heard nothing from the ZKB.
*Jefferson D Tomas, every individual at every Swiss bank that I spoken with on the issue has regretted the situation. They regret the loss of customers, the loss of income, the actions being taken against US persons and the actions being taken against Swiss citizens. Some are even shocked. One has to tread here carefully on the issue. As one individual wrote:
If Americans in Switzerland make too much noise and are too hostile towards Swiss banks, then they will alienate themselves with the general Swiss population, which will probably become racist against Americans as a result. Thus, in my view, it makes more sense to pressure US politicians on US legal issues, pressure the US embassy in Bern to expedite renunciations and to see if it can become easier for victims of US policy to become Swiss citizens.
@swisspinoy IF they would be racist against Americans for making noise, then they do not love their own country and their own democracy. We would be doing them a favor by pointing out that they are on a road to hell that Europe went down before and we swore to never again go down..
“We’re very sorry we are comitting treason against the constitution and the sovereign Swiss people, of which you are one of them, but we have to close your account”. Right. My response “banker: you are a traitor, be ashamed of yourself”.
@Uncle Tell, about Zuerich bank, just another example of how it pays when a bone fide resident sticks to his proverbial guns. They don’t want your FATCA problems, but they don’t want you on their backs either. Minnow, ah heck, let’s just ignore him and forget about closing the account. I suspect there are many such accounts where the bank lists the owner as Swiss, end of story. If the IRS comes after them, they’ll just blame the customer.
Another thing, how many of us are there in CH? 20’000? More? How many duals? That may be .2% of the population but is a big enough minority that the banks can be assured to have plenty of people out to badmouth them. How would they like a couple of people standing outside their bank every day with placards reading “racist bank”. 20’000 people makes for a lot of shifts, especially if we are all out of work because we don’t have an account in which to receive our salary.
Anyway, we can also blame the UBS, Wegelin and others for knowningly soliciting dirty deposits from tax evaders in the US itself. Maybe why that is why the UBS is still offereing accounts to Americans in Switzerland, they don’t want to get sued because they provoked the IRS crackdown.
*This might depend upon the relevance of one of Dan’s (I believe) remarks. If yielding to US policy in favor of Americans in Switzerland causes great harm to most Swiss people, then such may be seen as being a greater evil than causing harm to Americans in Switzerland in response to American policy for the greater benefit of most Swiss. Most Swiss will favor the later with Americans being seen as being victims of US policy.