13 thoughts on “Breaking News on the DOJ and Swiss Banks- Wegelin”
As one of the commenters said, “is this the onion or comedy central?”
Would you take a verbal pledge from these guys..?
ZURICH (Reuters) – Swiss chief finance diplomat Michael Ambuehl was given a verbal pledge from the U.S. Department of Justice to respect Swiss law when asking for bank client data of potential tax dodgers, a newspaper reported on Sunday.
Of course I’ll respect you in the morning . . .
Even if the US plans to respect Swiss law, as indicated in the Reuters article, it is a distinction without a difference. See the following excerpt from an article on the Bank Wegelen case in Saturday’s Neue Zürcher Zeitung (translated):
“Townsend sees the admission of guilt (by Bank Wegelin) as more of a symbolic value for the United States. This would signal to Washington’s own taxpayers that even banks that have no presence in the US cannot not hide from the US Department of Justice. In general, the statement by (Bank Wegelin partner) Bruderer is also not new: Everyone knows in the Swiss financial sector now that the former times, i.e., the acquisition of black money from developed countries, is over. Neiman (an attorney in private practice who previously prosecuted UBS as a US attorney) indicates a difference from the UBS case: UBS admitted to violations in the Deferred Prosecution Agreement (DPA), which the bank had made in the USA.Wegelin has admitted, however, to have committed a crime under US law in Switzerland, although this behavior in Switzerland is not punishable.”
There’s a lengthy article in today’s Neue Zürcher Zeitung called “The Arm of American Justice is becoming increasingly longer”. The main points of the article:
1) The Northern Mariana Islands, a US territory, sued in a New York court for payment of back taxes owed by the ComputerLand founder, Millard, when he lived in Saipan in the 1980s.
2) The NY court identified that Millard had an account at a Credit Suisse (CS) subsidiary in Zurich and ordered it to be frozen.
3) CS Zurich complied with the US court order, although under Swiss law, bank accounts can only be frozen at the request of a Swiss Federal court, Swiss Federal prosecuting attorney or, in limited cases, by the Swiss Federal council, none of which was done.
4) Millard’s Swiss attorney filed a criminal complaint against CS for violation of Swiss criminal law article 271 which prohibits acting for a foreign power and also that this effectively places bank accounts under US court jurisdiction.
5) “In the conflict between American and Swiss law, CS decided indeed for US law, which is also shown by a position statement of CS attorneys. Prior to the freezing they warned that a refusal by CS would result in “a high fine due to disregarding instructions of the US court”. The US court would “namely not allow for the possible conflict with Swiss law.””
6) Final paragraph: “If the actions of CS are not judged as being unlawful, it could mean, ultimately, that each account with a Swiss bank with any connection to the United States would be subject to US jurisdiction. Even in a divorce or other civil actions, US courts could freeze assets in Switzerland. Swiss law would be undermined.”
@Innocente Well, we will have to see if the Federal Attorney General’s office actually presses charges against Credit Suisse. If it doesn’t this would be a very bad sign.
An editorial in this week’s “Weltwoche” discusses the Bank Wegelin guilty plea and makes the following comment (translated):
“Power is the law. Hummler and Bruderer (two lead partners of Bank Wegelin) are the first known victims of a new kind of phenomenon, which indicates a return to the Middle Ages. For the first time a company was destroyed under foreign pressure although the said company had broken no law in the country in which it was located and did business. The territorial sovereignty of the Swiss legal system was out-muscled. The principle of double incrimination was not valid. American power has forced American law into place between Zurich and St. Gallen. It was like it was under feudalism in the Middle Ages: the territory did not determine which law was in force, rather the inescapable personal relationship of the vassal to the liege lord was authoritative, which in this case is the relationship of the American taxpayer to his government.”
@Innocente
Thanks for that. We really should have a separate blog post on the Wegelin story. Just haven’t gotten around to it. I have put up some on the Ask your Questions thread, for lack of a better place.
This might be of interest to our Brockers in Switzerland.
On the post edit page, you have to hit the Update button down on the left column. 🙂
mvh
@Just Me- thanks for the help. I had been trying to go the edit post route and obviously not meeting with any success. I hope that this helps.
@recalcitrantexpat
Perfect…
There has been a lot of discussion on Wegelin around, and good to have that name in the titel. Appreciate it. btw, twitter was down, so could not respond back to you.
As one of the commenters said, “is this the onion or comedy central?”
Would you take a verbal pledge from these guys..?
ZURICH (Reuters) – Swiss chief finance diplomat Michael Ambuehl was given a verbal pledge from the U.S. Department of Justice to respect Swiss law when asking for bank client data of potential tax dodgers, a newspaper reported on Sunday.
Of course I’ll respect you in the morning . . .
Even if the US plans to respect Swiss law, as indicated in the Reuters article, it is a distinction without a difference. See the following excerpt from an article on the Bank Wegelen case in Saturday’s Neue Zürcher Zeitung (translated):
“Townsend sees the admission of guilt (by Bank Wegelin) as more of a symbolic value for the United States. This would signal to Washington’s own taxpayers that even banks that have no presence in the US cannot not hide from the US Department of Justice. In general, the statement by (Bank Wegelin partner) Bruderer is also not new: Everyone knows in the Swiss financial sector now that the former times, i.e., the acquisition of black money from developed countries, is over. Neiman (an attorney in private practice who previously prosecuted UBS as a US attorney) indicates a difference from the UBS case: UBS admitted to violations in the Deferred Prosecution Agreement (DPA), which the bank had made in the USA. Wegelin has admitted, however, to have committed a crime under US law in Switzerland, although this behavior in Switzerland is not punishable.”
http://www.nzz.ch/aktuell/wirtschaft/wirtschaftsnachrichten/-1–1.17922024
…said the spider to the fly.
There’s a lengthy article in today’s Neue Zürcher Zeitung called “The Arm of American Justice is becoming increasingly longer”. The main points of the article:
1) The Northern Mariana Islands, a US territory, sued in a New York court for payment of back taxes owed by the ComputerLand founder, Millard, when he lived in Saipan in the 1980s.
2) The NY court identified that Millard had an account at a Credit Suisse (CS) subsidiary in Zurich and ordered it to be frozen.
3) CS Zurich complied with the US court order, although under Swiss law, bank accounts can only be frozen at the request of a Swiss Federal court, Swiss Federal prosecuting attorney or, in limited cases, by the Swiss Federal council, none of which was done.
4) Millard’s Swiss attorney filed a criminal complaint against CS for violation of Swiss criminal law article 271 which prohibits acting for a foreign power and also that this effectively places bank accounts under US court jurisdiction.
5) “In the conflict between American and Swiss law, CS decided indeed for US law, which is also shown by a position statement of CS attorneys. Prior to the freezing they warned that a refusal by CS would result in “a high fine due to disregarding instructions of the US court”. The US court would “namely not allow for the possible conflict with Swiss law.””
6) Final paragraph: “If the actions of CS are not judged as being unlawful, it could mean, ultimately, that each account with a Swiss bank with any connection to the United States would be subject to US jurisdiction. Even in a divorce or other civil actions, US courts could freeze assets in Switzerland. Swiss law would be undermined.”
http://www.nzz.ch/aktuell/wirtschaft/wirtschaftsnachrichten/der-arm-der-amerikanischen-justiz-wird-immer-laenger-1.17928605
@Innocente Well, we will have to see if the Federal Attorney General’s office actually presses charges against Credit Suisse. If it doesn’t this would be a very bad sign.
An editorial in this week’s “Weltwoche” discusses the Bank Wegelin guilty plea and makes the following comment (translated):
“Power is the law. Hummler and Bruderer (two lead partners of Bank Wegelin) are the first known victims of a new kind of phenomenon, which indicates a return to the Middle Ages. For the first time a company was destroyed under foreign pressure although the said company had broken no law in the country in which it was located and did business. The territorial sovereignty of the Swiss legal system was out-muscled. The principle of double incrimination was not valid. American power has forced American law into place between Zurich and St. Gallen. It was like it was under feudalism in the Middle Ages: the territory did not determine which law was in force, rather the inescapable personal relationship of the vassal to the liege lord was authoritative, which in this case is the relationship of the American taxpayer to his government.”
@Innocente
Thanks for that. We really should have a separate blog post on the Wegelin story. Just haven’t gotten around to it. I have put up some on the Ask your Questions thread, for lack of a better place.
This might be of interest to our Brockers in Switzerland.
http://www.reuters.com/article/2013/01/21/us-reutersmagazine-davos-swiss-rich-idUSBRE90K0F420130121
@recalcitrantexpat
On the post edit page, you have to hit the Update button down on the left column. 🙂
mvh
@Just Me- thanks for the help. I had been trying to go the edit post route and obviously not meeting with any success. I hope that this helps.
@recalcitrantexpat
Perfect…
There has been a lot of discussion on Wegelin around, and good to have that name in the titel. Appreciate it. btw, twitter was down, so could not respond back to you.