Innocente made the following comment:
Swiss newspapers are reporting that two children of a Swiss asset manager were interrogated by US customs as to the whereabouts of their father, what their father did, whether their father made trips to the US, etc. They were entering the US to visit their grandparents. Sorry, interrogation of children looks like something from the Gestapo playbook. Here’s an article on it in French:
Les deux ados d’un gestionnaire de fortune genevois interpellés aux Etats-Unis
Here is a translation for the first couple paragraphs by Innocente:
“What a holiday! On a beautiful Sunday in May, two teenagers from Geneva and children of an asset manager took off from Geneva Airport. They left for the U.S. to visit their grandparents, who live in that country, while their parents remained in Switzerland. Upon arriving at the airport of a large city *, these two minors were given special attention of police. “Where is your dad? What does your dad do for a living? Has your dad ever worked in the United States? “Both young men were subject to these questions and others for six hours at the offices of the police. They weree not allowed to contact people outside. Throughout the questioning their parents and grandparents received no information. These facts, reported by a Swiss lawyer, suggest what a large part of the Swiss financial center have been fearing: the U.S. authorities have already begun to exploit the (employment) data delivered in April by five banks….”
Here is a partial translation thanks to Jefferson Tomas:
The banks recommend that their current and former employees whose names were transmitted to the other side of the Atlantic avoid going to the US. But such a precaution seems to be quite insufficient, considering the number of extradition treaties that exist. “I encourage my clients not to leave Switzerland” said Douglas Hornung, Attorney at Law in Geneva, who represents approximately 40 employees of banks involved in this matter.The disagreements go much further than a limited choice of vacation destinations, or family visits that must be postponed. Few banks in Switzerland or elsewhere, perhaps none at all, are interested in employing a “listed” bank employee from one of the 5 banks who gave data to the Department of Justice in order to avoid criminal prosecution. Careers risk being derailed because of this. « Banks are not afraid to expose their employees to potentially devastating consequences » wrote another newspaper “Le Temps” last month.
A double unknown makes the situation worse: nobody knows how the Yankee justice will use the information that they have harvested. Thousands of people are unaware that they are involved. [Sounds like many USPs] “If one had to inform everybody, one would be talking about thousands of persons…”, said the CEO of Credit Suisse, Brady Dougan [He is American I believe], “…If an employee is concerned, they can ask for information.” Ex-employees are only rarely informed.
Doubts about legality
This matter has caused accusations of treason in the Swiss financial world. Opinions of [legal] experts have only reinforced this. The Swiss Federal Commissioner on Data Privacy, Hanspeter Thür, has continually repeated his doubts about the legality of delivering employee data to the American administration. “The employer does not have the right to reveal the names of its employees. If it is compelled to do so, it must inform the employees, and cover any damages and legal fees, warns Thomas Geiser, Professor of Law at the University of Saint-Gallen.Huge Inconsistency
The five banks implicated in the matter can certainly defend themselves. The Federal Council formally authorized the transfer to the DOJ of identity data concerning the 10’000 employees. This is inconsistent: in 1997, in exactly the same sort of circumstances, two banks asked for a similar authorization to respond to DOJ requests. The Federal Council refused it at that time considering that Swiss banking laws prevented such.
One key quote from the article is this:
Imagine the next scene. Two grandchildren of American residents have landed in America from Paris, London, Bern, Toronto or Frankfurt, where their parents, whose names were given to American authorities as a result of FATCA legislation. The TSA or customs officials begin to question these children for six hours:
Where are your parents? Do your parents file their US income taxes? Are they planning a trip to the United States? Do they keep gold or silver coins and bars hidden around the house or in a safety deposit box? Do your parents own a business or farm? Do they ever say negative things about the United States? We will let you see your grandparents only if you answer our questions, otherwise you can just sit tight.
@Jefferson, I’ve put your translation in the original post and removed the French text, etc. Hope this works for you.
@Innocente, I’ve added your translation as well.
Corrolary article: http://www.tdg.ch/suisse/Les-methodes-intrusives-des-EtatsUnis-sont-inacceptables-/story/25293183
“Following the detainment of two children who were on their way to the US for vacation, the tension mounts to a higher level. Jean Christophe Schwaab, the President of the French-speaking branch of the Association of Swiss Bank Employees, the limit of what transfer of bank data is acceptable has been passed.”
So, they don’t care about Swiss citizens that want bank accounts with them but have a US connection, but when it is the employees that are targeted, then they get upset.
Maybe the US will keep escalating this to the point that finally people WILL “Just say NO”.
If the kids were American citizens this story might be upsetting, otherwise it’s just another questioning at the border by US officials. Big deal.
The rapid developments in Switzerland are so alarming that I’m thinking all Brockers need to put extra focus on this right now. What is happening there and what the USA is allowed to get away with there is critical to all of us. For years I have been watching USA policy in many areas (foreign aggression, police state tactics, rising poverty, etc.) because I know we have a long porous border and a parliament prone to porous heads so what happens in the USA can happen here (and has in some instances already) and now I feel like I must be on a Swiss watch too. Okay I know “on a Swiss watch” is a punny choice of words but I’m just saying, forewarned is forearmed. Here’s another article in case it hasn’t already been referenced to somewhere else …
http://www.swissinfo.ch/eng/business/Betrayed_bankers_sue_after_US_names_transfer.html?cid=33182150
@Em I agree, especially with the Federal Council somehow carrying on in such an uncourageous way, we need all the help we can get here in Switzerland.
@WoahIt’sSteve It is a big deal. The problem here is that now even family members are being harrassed because the banks violated their privacy and divulged their information. In Switzerland, employee records often neccesarily contain the names of all immediate family members.
@ WhoaitsSteve, no big deal. I don’t ever think it would be safe for me to go to the USA. The Swiss lawyer says to employees of the banks don’t go to the US. Now it’s obvious that their children can’t go either. And your reaction is that it’s no big deal because they aren’t Americans? Unbelievable.
*this is truly frightening, could be applied in reverse to renunciants entering the US
Who are you visiting? family
What are their names?, what do they do for a living?
Would the US use our status to question the loyalty of family members, suspend clearances or eligibility for civil service positions etc.
It’s getting even better:
And at least some Swiss banks are now also insisting that their clients
who have bank accounts in the US close them or risk seeing their Swiss
accounts closed. A Swiss businessman who owns a large company in Japan
told GenevaLunch in Honolulu this week that he had flown to the city
from Tokyo to close out his firm’s US accounts, at the behest of UBS,
their main bank.
http://genevalunch.com/blog/2012/08/06/swiss-say-new-us-demands-slowing-down-tax-deal/
@Jefferson If my father had committed crimes or abetted the commission of crimes in Switzerland, and I was held at the border entering Switzerland, not denied entry simply questioned, maybe the prolonged time is an issue, maybe. I don’t expect to just be let in to Switzerland I don’t have a right to enter, if by questioning me the investigator’s think they can gleam more information in the prosecution of a crime, that’s the way it is. The teens chose to enter the US, the US didn’t go apprehend them. The privacy thing is an issue, but that’s not a US issue it’s a Swiss issue.
@Petros I don’t think I have a right to enter Canada, Switzerland, or any other nation that I am not a citizen of. If I was detained at the border and questioned, I would feel I have no claim that it was unjust, unfair, or outrageous, as a nation’s border is it’s last line of defense. By presenting myself for entry to any foreign nation, I’m at the mercy of that foreign government, I am a guest to the good grace of that foreign administration. Like I wrote if my father had committed or abetted in the commission of a crime in that country and the authority’s thought questioning me could help their investigation then that’s the way it is. It’s dumb really dumb, the teens in all likelihood have nothing to do with banking and it was probably a futile interrogation but I still think it’s not a big deal.
@Whoait’sSteve, well as long as we know there’s a reason to use terror methods on children. You are not reassuring me.
Let me see there have been countries in history where children are coerced into ratting on their parents. Can you guess which ones?
@Petros Yeah, they were bad news this however doesn’t seem to me to be correlated, though tangentially the Swiss have a checkered history regarding banking including specifically with the country in which you are referring to.
I don’t see how it is terror, they weren’t jailed, they were questioned, I don’t know if at the border you get a phone call or an attorney present, I wouldn’t think so, but if you are entitled to that, and it was denied I think they should litigate.
The Swiss see this as terror:
@Swisspinoy
Maybe in the future renouncing citizenship and cutting all financial ties still won’t be enough to cut all US ties. I’ve long wondered if those with US based parents might have to get themselves disinherited as well and show a copy of their parents’ will at request proving this fact so as to alleviate any fears that they might turn into US persons again through inheriting property or US financial accounts…
@Whoait’sSteve
6 hours of questioning unsuspecting and innocent teenagers without any legal representation is not how a modern democratic society operates. If an EU country had harassed US citizen teenagers in the same manner whilst visiting here I bet that the US ambassador to the country in question would have raised a fit and the US press would have been all over the issue. On either side of the world this is simply reprehensible conduct however you look at it.
oh sigh…
There is enough details missing here to not to engage in a lot of speculation yet, and I think I would not use gestapo language to describe this, as police or surveillance State would do… 🙂
I do wonder if the questioning was related to a DOJ inquiry, but how would they know the kids were arriving on an in bound flight? Although, to answer my own question, with all PNR data on inbound passengers having to be sent to America prior to a flight’s arrival, I suppose there could have been some tip off, assuming they are competent enough to notice. I have no idea what is on a Custom official’s computer screen or if they tag names on a “question when arriving” list. I suppose they could just be waiting at the gates for the kids with a Surname XXXX to deplane…although that seems highly unlikely.
However, as screwed up as the administration of the “no flight list” is and the difficulty of figuring out who is on it or why, I suppose anything is possible, and getting a clear understanding of what happened or why would be damn difficult. So, on this first story, I am not sure I would draw a straight line from cause to effect.
We may have a mix up with correlation and causation in a Journalist’s mind leading to speculation that could be wrong. I am just exercising a little skepticism without some more investigative journalism. I do understand the uncertainty and fear, however.
So, if the Swiss want to be mischievous they can reciprocate on residents of Wyoming or Delaware with their secret and anonymous Corporation registration practices that must be evading some Swiss law, right? Once the speculation starts, the story just spreads… In a tit for tat they could question a Wyoming or Delaware officials kids arriving for a ski trip in the Alps for some extra territorial questioning. 🙂
Listen to about the last 10 minutes of this podcast… Where the BIGGEST havens are.
@Em and others
With respect to Em’s “Swiss watch”, the fact that the US has basically won its war on Swiss banks is impacting what Switzerland is revealing to other countries. In Sweden, it was announced yesterday that a signed agreement between Switzerland and Sweden goes into effect today. Switzerland will give account information on Swedes with accounts in Switzerland when requested. This was heretofore not possible. It is estimated that there are about 70,000 Swedes who have accounts in Switzerland. See the link (in Swedish).
http://www.svt.se/nyheter/sverige/stopp-for-skattefuskare-nu-far-skattesmitarna-se-upp-stopp-for-skatteparadis
Sweden has residence based taxation. All worldwide income is taxed if you are resident in Sweden.
Of interest is the fact that in the article the Swedish Tax Authority mentions its Voluntary Disclosure program (frivillige rättelse). In the last 2.5 years, 2500 people have made a voluntary disclosure and the program has brought in around 1 billion SEK which is around USD 150 million. It may seem small, but there are only 9 million people in Sweden.
Sweden has a similar voluntary disclosure policy to that of Canada. People making a voluntary disclosure pay taxes due for the last 5 years and the interest due on the taxes. That’s it. Sweden does not require naming bankers or expensive lawyers arguing reasonable cause. The Tax Authority’s interest is in getting things right, not in raking everyone over the coals such as has been done in OVDP and OVDI.
*The story has been leaked to the newspapers by a Swiss attorney and there is no official confirmation from the US Embassy, US Borders authorities nor from the Swiss authorities, which without doubt would have been first contact of the worried parents, nor from the Swiss Federal Government that would have summomed the US Ambassador for clarification, that it occurred…
@ bernard, So you disbelieve the story because it is unconfirmed? Do you think that the attorney is just trying to drum up fear? To what end?
I would imagine that Swiss journalists are exaggerating just a bit. But we’ll see as time moves on. I don’t believe in detaining children, if that’s really what happened. But at the same time, I know how the US is and I don’t run around telling people to go visit the US.
Switzerland, especially the banks, has ended up on the USA “poo-poo” list (<– censored so not to offend). Even if these Swiss individuals have NEVER helped anyone evade US taxes, the last place I’d travel to would be the USA. And what percentage of the Swiss population is employed by banks? Very high per capita.
It’s kind of amazing though; the US Gov is using just a few examples of REAL tax cheats to effective HARM millions of people. Seriously, count backwards. How many REAL tax cheats have used Swiss banks? Not many according to the DOJ website. I think we can count the numbers on 1 hand. But we all know how bureaucracies work: if they can’t justify funding, they are kaput.
Em
Just read that Bankers sue story. I can understand them being upset. As it says…
Does that ‘collateral damage’ sound familiar..?
I assume you also saw this story on Switzerland capital flight…
Capital flows are going everywhere which way these days (including out of US Tax Haven accounts) as a result of all these offshore tax evasion crackdown efforts by the OECD, EU and US FATCA Fanatics. And just where it settles, and what the ultimate impacts are, is unknown.
One thing for certain, it will impact more than just U.S. Persons abroad, for sure, and like the War on Drugs, it won’t work. It will just distort the market in unintended ways. If somehow the impacts were just limited to the real evaders, you might say fine, but sadly because of our interconnected financial systems these days, we will all be impacted. We all have systemic risk associated with these global missions for tax transparency.
Money like water flows to the lowest elevation point, and if you erect a dam in Switzerland, it will find its way somewhere else, yet to be determined. Frankly, as much of it as there is moving around the world in attempts to stay ahead of the International Revenue Service to remain hidden, it is probably helping keep down inflation right now as it is not being put to productive use to fuel job creation and demand.
@ Just Me
Collateral damage? Yes, it absolutely does sound familiar.
I never thought about where the capital will go next but now I have visions of those electronic digits wandering from country to country looking for a safe place to rest. I sense that all this wandering will not improve any country’s economy and that includes the USA.
The current, corrupt system of banking might well fall into ruin as some are predicting but if it does then what? Could it all just build up again and end in yet another fall 50 years from now? If the system doesn’t change it will. But this is way beyond my ken. What I do understand is that we are living in an upside down world when an artist is arrested for chalking CROOKS, CRIME and CHAOS on the sidewalk in front of a Chase Bank and yet bank CEOs continue without consequence to preside over elaborate schemes to “relieve” others of their money. (I was watching a Max Keiser, Michael Hudson interview this evening.)
I have a few random thoughts on this:
– Those teenagers (probably old enough to serve in an army and vote since they were traveling without parents) were linked to their parents before their flight left Geneva. It’s all computerized now, and as time passes they will keep gathering more information on us.
– Our Swiss cousins recently returned to visit my father-in-law in the US and for the first time they travelled without their chidren. The immigration agent said “oh, I see you don’t have the children this time”. They know all about our travel histories.
– Said father-in-law was recently back in Switzerland for his 80th birthday and his nephew, a butcher, gave him some local specialties to take back to the US. Unfortunately he had been caught “smuggling” 6 Canadian hot dogs into the US a year before and fined him $100. At customs they asked him if he had anything to declare, then searched all his bags and found his prized smuggled wurst. Fine: $500. They used his credit card. These Swiss kids are now in the US immigration computers and who knows who else’s (Interpol?).
– My Cantonal Banker/wealth advisor who has had to drop several American clients due to FATCA, says he will never travel to the US again. Now I guess his children won’t either. Great PR for the greatest country in the history of the world.
– It’s too bad they didn’t mention the city or airport. My guess is that there are big differences between airports as they would all have different immigration and DHS branch officers.
– In the Spring I was detained for a few hours at immigration due to the recent appearance of an old drug conviction on the immigration computers. I was sent to the immigration holding pen. There were a few dozen people waiting there in rows of chairs and 2 desks in front with 2 kids (early 20’s, ex-military looking) working on cases. There were several offices behind the desks with immigration officials regularly coming and going. I had to place my passport into a slot in a long row of passports and take a seat and wait. and wait. Meanwhile I got to witness some of the drama. There was the near-hysterical woman who had been detained in one of the interview rooms for a long time who was finally allowed to go get her luggage from the conveyor belts. There was the furious couple who had been detained yet again in a case of mistaken identity. In the biggest office was the “officer on duty”. The young guys were constantly going to the officer to get clearance, orders, etc. When my case finally came up (after more than an hour waiting) the kid at the desk had to go back to the officer a few times to clarify stuff, show him my copy of my CLN that I had with me. In the end it was the decision of the duty officer to give me a special one time Visa instead of sending me back to Switzerland. So I imagine that each airport has a certain degree of leeway in how to handle this stuff.
WhoaIt’sSteve* What you are overlooking here is the Children’s father is not a suspect of commiting crimes or abetting the commission thereof. They are simply offspring of a Swiss National that happens to work at a bank.
“If my father had committed crimes or abetted the commission of crimes in
Switzerland, and I was held at the border entering Switzerland, not
denied entry simply questioned, maybe the prolonged time is an issue,
maybe. I don’t expect to just be let in to Switzerland I don’t have a
right to enter, if by questioning me the investigator’s think they can
gleam more information in the prosecution of a crime, that’s the way it
is. The teens chose to enter the US, the US didn’t go apprehend them.
The privacy thing is an issue, but that’s not a US issue it’s a Swiss
issue.”
What really surprises me about this case is that ICE managed to successfully link a non-American who was not physically present, and his (presumably non-US-born) children. The obvious question is whether that’s a one-off high level of effort that they’ve aimed at this specific banker, or whether they’d gathered the data previously (e.g. when they came to the U.S. as a family) — or more ominously, whether this kind of tracking is something they could easily apply to link an American and his non-US-born children to force them to be recognised as Americans.