Where to go as Swiss are Shutting out U.S. Taxpayers
By: Julian D. W. Phillips, Gold/Silver Forecaster – Global Watch – 28 February 2013
…even the leading Swiss Vault in Switzerland, Via Mat, is taking action to take themselves out of the firing line of the IRS, etc., by no longer accepting private customers with a potential U.S. tax liability. The letter sent by Via Mat to customers who fall into this category states:
“We are currently experiencing rapid and substantial changes in the general regulations within this business. The changes mainly relate to the tax structures and taxation systems of various countries. As a consequence of these changes VIA MAT INTERNATIONAL has taken the decision to stop offering this service at its vault [sic] outside of the U.S. to private customers with potential US-tax liability…”
http://news.goldseek.com/GoldForecaster/1362085200.php
There is nowhere for US persons to go. They lost the birth lottery.
fragged
It advertises STockbridge—-is that confirmed as a real business—-some of these gold sales on the internet are scams
This has also been posted here:
Steuer-Angst: Schweizer Wert-Logistiker lagert kein Gold mehr für US-Kunden
07.03.13, 22:33
http://deutsche-wirtschafts-nachrichten.de/2013/03/07/steuer-angst-schweizer-wert-logistiker-lagert-kein-gold-mehr-fuer-us-kunden/
Translation: Tax fear: Swiss value logistics won’t store gold from American customers
Whatever happened to that great sentence in the IGA, which stated that banks could not discriminate against Americans? I thought Switzerland was now a member of the coalition of the willing.
@Mark Twain
Signed yes. Ratified in Parlaiment, not yet. I guess the more US persons you turn away the better you might be in the future? The IGA says that only LOCAL Banks could not discriminate against US citizens. Until the IGA is ratified the banks are doing all they can to minimize the possible damage in case the IGA gets rejected!
Here’s an article (for those who understand German) describing the flow of funds out of Switzerland into the tax-haven Miami, USA as a result of the USAs judicial proceedings against Swiss banks. It disgusts me to no end the way the USA simply destroys foreign institutions beyond their jurisdiction and then, to top it off, US banks take up that business by acting as a tax-haven themselves.
Deutsche Steuerflüchtlinge: Miami wird die neue Schweiz
“Unter wachsendem Druck wandern deutsche Steuerflüchtlinge aus der Schweiz ab. Ein neues Ziel könnte ausgerechnet Florida sein. Denn die USA gingen zwar wie kein anderes Land gegen die Steueroase Schweiz vor. Die Privatsphäre ihrer eigenen Bankkunden aber schützen sie umfassend.”
http://www.spiegel.de/wirtschaft/soziales/florida-steuerfluechtlinge-aus-der-schweiz-fliehen-in-die-usa-a-887381.html
@Mark Twain
It is only local banks who register for Deemed Compliant FFI status who are not permitted to discriminate against US citizens. Everyone else is, by definition, free to do so.
The benefit for becoming a deemed compliant FFI in the local bank exemption is that you don’t have to report on accounts with US indicia whose account owners are resident in your country of operation (you still have to report on accounts with US indicia outside your country of jurisdiction). It’s really not much of a carrot considering that you still have to implement FATCA and make the exorbitant investment into your IT infrastructure to do so. You have to be able to report but then just don’t transmit the data.
The trade off a local bank has to make is to decide whether giving up the right to discriminate against US citizens is worth the, likely, immaterial benefit of not having to report on accounts with US indicia resident in your country of jurisdiction. I still think that there will be very few banks that will register for this because I don’t think they will agree to restrictions on operating their business in exchange for very little savings for not having to report.
Furthermore, one of the qualifications for falling into the local bank category is that >98% of your customer deposits (including entities) must be from residents of your own country. That could be a difficult standard to meet particularly if you have a fair number of retiree customers resident outside your country or if you offer accounts to business customers outside your country. In that instance, you may be forced to shed citizens of your own country resident outside the country with whom you’ve been doing business for 20-40 years to get to the >98% threshold in order to be able to register as a deemed compliant FFI. I really can’t see banks rushing to fill the requirements of this category and taking on the anti-discrimination restriction.
I’m damn glad that I NEVER told my banks that I’m a US person, I always just flashed them my Swiss ID-Card 🙂 Now I’m waiting for the day that the Swiss banks send ALL their customers a questionaire asking us if we are US persons. I wonder what the punishment will be for telling a white lie? 🙂
In February 2012 the US DOJ indicted a small private bank in Switzerland called Wegelin. This sent a shock wave through the Swiss banks at which point began the discrimination against American customers.
The Neue Zürcher Zeitung carried a commentary this week called “The penalties are the worst – lessons from the Wegelin case”. A translation follows:
“The private bank Wegelin is off the hook with the US government – but at what price. The bank will return its license soon after 272 years of world history during which it survived. The US Treasury is to receive $74 million from its owners, and the file is be laid ad acta. Five lessons can be drawn from this case.
First, the Wegelin example illustrates that larger institutions in the banking sector have a bonus because governments do not want to run the risk that their failure could threaten the stability of the financial system. UBS was allowed to avert an indictment through an out-of-court settlement. The smallish Wegelin, from an American perspective, however, was indicted.
Second, from the indictment was particularly apparent that Wegelin and its management had learned nothing from the UBS case but instead recruited “homeless” UBS clients in 2008 with their untaxed money.
Third, it looks at least at first glance as though it has become more expensive to come to terms with the Americans. UBS had paid $780 million in penalties for $20 billion in untaxed funds, Wegelin with $1.2 billion in American assets, paid $74 million in fines. The ten other Swiss banks, which are still the focus of Americans, will take notice.
Fourth, for the first time, with Wegelin, a bank that was not operating in the USA, admitted to having committed a crime under US law in Switzerland, although this behavior is not punishable in Switzerland. The case has for American prosecutors a strong symbolic meaning. The signal to the American people is clear: a bank that has no operations in the US is not safely out of reach of the long arm of American justice.
The fifth finding is related and weighs most heavily: if the extraterritorial application of law making become popular with other large powers beyond the United States, this will put more and more holes into the legal security and sovereignty of small countries.”
http://www.nzz.ch/aktuell/wirtschaft/reflexe/die-busse-ist-nicht-das-schlimmste-1.18041245
The name of the Neue Zürcher Zeitung commentary should read: “The penalties are NOT the worst – lessons from the Wegelin case”.
Interesting post at Zero-hedge…
Why Is JPMorgan’s Gold Vault, The Largest In The World, Located Next To The New York Fed’s?
@notamused and Innocente
Let’s combine the two articles. UBS had $20 billion of US assets and paid $780 million, Wegelin had $1.2 billion of US assets and paid $74 million (or a 6.17% fine). Florida alone, according to the Florida Bankers Association in the Spiegel article, has $100 billion of foreign assets (though the actual estimate in testimony was $60-$100 billion). Florida banks therefore owe the rest of the world $6.2 billion in fines under the US standard set by the Wegelin prosecution.
The hypocrisy is staggering but entirely expected.
@Innocent, the last paragraph may have some relevance to a comment of mine that I posted on Forbes:
http://www.forbes.com/sites/robertwood/2013/02/14/us-and-switzerland-sign-new-fatca-agreement/#comment-3338
@Just me, Zero-hedge report is interesting, considering:
http://deutsche-wirtschafts-nachrichten.de/2013/03/07/steuer-angst-schweizer-wert-logistiker-lagert-kein-gold-mehr-fuer-us-kunden/
Translation:
For Americans, it is of significant importance for their gold to be stored outside of America because the happenings during 1933 are still a relevant warning. Back then, the US government forbid Americans to possess gold. Coins, bars and certificates had to be sold to the government at a fixed rate and it was confiscated from those who didn’t sell it. The feds searched safes and deposit boxes, but only in the US.
@Edelweiss
Nice little calculation you’ve done there.
“The hypocrisy is staggering but entirely expected.” Exactly. All the more staggering when one considers that we’re talking about just one single state.
notamused: thanks for the link to the abbreviated Handelszeitung article in Der Spiegel. The paper HZ has the full article. Following is a translated excerpt:
“ “To this day, bankers in Miami are not interested in the origin of the funds coming to them,” says tax expert Hans-Lothar Merten. Rather a cry of horror sounded across Florida when the IRS last year, after having reflected on it, began to require banks to report interest income received by foreign customers. This information could then be used in exchange with other countries. “Nothing requires banks to know the tax situation of their customers,” Grisel Vega castigated the suggestion. She is president of the Florida International Banks Association, a major lobbying organization in the sunshine state. Meanwhile, a similar provision has been put into force but hardly a bank abides by it. Instead, they recommend to their clients complex legal structures to continue to evade the tax authorities.
According Grisel Vega the discretion option offered by the United States is particularly important for customers in Latin America, because they would be exposed to an increased risk of kidnappings, if the data would become public. The financial center of Miami, so Vega continues, adds significant value for the economic growth of the whole country. Vega could have said: A white money strategy, as Switzerland is now implementing, could not be afforded by the US simply because of its horrendous debt. Instead, the country is dependent on the income of an entire offshore infrastructure that allows foreign individuals and international companies to conceal taxes. In addition to Miami, there are the states of Delaware, Nevada and Wyoming, where nested structures offer tax criminals a safe haven.”
Polish view on Florida tax havens (use a translator)
Floryda staje się nowym rajem podatkowym
We florydzkich bankach obcokrajowcy trzymają 100 miliardów dolarów.
http://forsal.pl/artykuly/688751,floryda_staje_sie_nowym_rajem_podatkowym.html
Don’t you just love it?
Translated from the article:
@SwissPinoy…
I get this reponse. “This webpage is not available”
@Just Me, from the polish link? It works fine for me. Try googling the title and then clicking on it from there:
Floryda staje się nowym rajem podatkowym
@SwissPinoy
Not sure what the problem is. I have tried that route, and still no joy! Darn…
@Just Me, I saved it to a PDF (with google translation) and emailed it to you. Hope you don’t mind. 🙂
Thanks for that. It finally came up for me tonight! 🙂