October 16, 2013
From: Bilan, Switzerland
By Mohammad Farrokh
The Swiss are likely to vote to overturn a FATCA agreement with the US Treasury Department, which has recently been ratified by Parliament. On October 8, a STOP-FATCA referendum committee has been set up, amid skepticism and fears of US reaction. Direct link to access the referendum is here
[Note: FATCA (Foreign Account Tax Compliance Act) is a law requiring Swiss Banks to transmit the financial data of US expatriates, as well as many Swiss citizens, to the IRS. Original French (translated by Victoria Ferauge): Money & Finance “FATCA: un référendum pour briser la peur”]
There is an atmosphere of vague fears, mostly half-formulated and at best half-expressed: such as losing access to the American market or even reprisals against Swiss corporations. These fears have gone to the point of leading the Swiss Parliament to accept an Intergovernmental Agreement (IGA) with the US, which will not bring any benefit to the country other than averting retaliation.
Once started, however, a citizens’ referendum follows its own momentum. “Speculations about a Swiss referendum against FATCA had been a matter of international buzz on the Internet, already three days before it was actually launched,” said Laurent Franceschetti, a banking management consultant at SettleNext. He reckoned that the best allies of the Swiss referendum abroad might be found in the United States, where James George Jatras and his web site RepealFatca.com are following the gathering of signatures with a mixture of joy and hope. If the referendum committee manages to gather 50’000 signatures by January 16, the Swiss people will be called on to vote on the matter in the course of the first half of 2014.
FATCA opponents calculate that the Swiss referendum may slow down, where still possible, the process of IGA signing [Inter-Governmental Agreements] started by the US Treasury. But it seems to have slowed down anyway: since the agreement with Germany on May 31, no new IGAs have been signed. Admittedly, France’s IGA had been on the agenda for French Finance Minister Pierre Moscovici, when he was visiting the US in October 10-12 [but the signature meeting had to be called off because of the partial shutdown]. Without counting France, the Department of Treasury has scored only 9 IGAs so far.
Considering that at least thirty IGAs would be needed, in as many countries, in order for FATCA to be a success, it appears that the Department of Treasury is still far off the mark. One major country, China, has apparently declined to go along the road to an IGA.
“FINMA Will Enforce U.S. Law”
Closer to Switzerland, Austria does not hide its skepticism about FATCA, according to Philippe Nantermod, PLR/FDP [liberal-radical] representative in the Parliament of the Swiss State of Valais [the Swiss Canton where the Matterhorn is located]. He had first to give up his project of launching a referendum because the PLR/FDP youth, at Swiss Federal level, had refused to back him up last June. But he is striking back, thanks to the fact that the referendum has taken off anyway, under the auspices of the Ligue Vaudoise and with a more decentralized structure. He is still confident to win over the general assembly of the PLR/FDP youth, at a meeting due to take place in Berne on November 2.
In the meantime, the vice-president of Swiss PLR youth, Alain Illi, has already committed his personal support in favor of the committee overseeing the referendum. And Philippe Nantermod stated that the PLR/FDP youth of Valais will set up stands in the streets to collect citizens’ signatures.
The arguments in favor of the referendum are miscellaneous. For defenders of Swiss sovereignty, notably the Ligue Vaudoise [a Lausanne-based conservative association] but also the Lobby des citoyens of Marc Studer, as well as for Yves Nidegger [a VOP (conservative) federal MP], Switzerland should not set a precedent. And Philippe Nantermod pointed out that the Swiss’ taking up US tax law, including its updates, will set a precedent that the European Union will invoke to its advantage in the future.
As for the Parti Pirate, involved from the beginning in the referendum committee, it insists on the protection of privacy. And it has a point: data collected under FATCA will be spread throughout the many US government agencies. “Tomorrow FINMA [the Swiss banking regulation authority] will enforce US law, including its future evolutions – as when banks will be required to turn in the names of their employees, ” said Philippe Nantermod.
Banks Are Implementing FATCA
To this progressive nature of the FATCA agreement, supporters have few arguments to oppose except legal security, but this is failing to strike a chord. A possibly better argument, is that banks have already started to implement FATCA and that they will continue to do so, with or without referendum. While this is a reality resulting from the sheer weight of the US, it remains unclear why Switzerland should necessarily legalize this state of affairs, with the added risk of making it a legal precedent.
Even so, it is not certain that Swiss banks will apply FATCA for long, as it is doubtful that this American law will be implemented at all, unless a vast majority of countries accepts to participate – if anything because the costs are unsustainable: up to 3 billion dollars for the United Kingdom, according to an official estimate and perhaps 1 billion in Switzerland (although to date there are no reliable figures). All this in order to net $892 million for the IRS if the whole world were to play the game, which very likely it will not.
In the unlikely event that Swiss banks put up a fight, there is doubt that the United States would be in a position to put their threats into action. “If Swiss banks were barred from using US dollar transactions, then the commodity trading business in Switzerland would be disturbed; this might give even more arguments to those who are currently campaigning for the replacement of the Dollar with the Euro in international trade” says Laurent Franceschetti. As the American saying goes, the US Treasury Department would end up shooting itself in the foot.
Link to original posting on IBS regarding the referendum.
I cannot find a link to the Swiss petition – would like to sign and circulate to all Swiss I know.
Finally found it – link in gray background about half-way down the page:
Wish I could sign it (not a CH citizen) but will circulate the link!
On twitter, the pirates and SVP twitt:
Translation: Don’t export Swiss living in Switzerland to the American Treasury.
This the point that I also tried to get across. A pirat asked: “Is it really the job of the pirate party to protect the privacy of American citizens from the American government against the interests of the involved banks?”
My response was that a Swiss citizen living in Switzerland is a Swiss citizen, not an American, regardless if they happen to have a US passport or not.
Thanks for pointing that out. I added a direct link to access the referendum at the top.
Swisspinoy, and that is the very heart of the matter, isn’t it? FATCA is basically a way to strip us of citizenship in the lands we live in because for our govts to recognize it, they have to admit we aren’t their citizens but strictly USA property.
I don’t understand why this is so hard for people to understand. It’s an even bigger issue than the privacy concerns. It’s about sovereignty and citizenship.
One thing is for sure, FATCA is turning me Canadian to my core in a way that nothing else probably could have.
I really hope that the Swiss Referendum passes! Some may know that the California referendum system was adopted from the Swiss system. It is very powerful and I pray the Swiss people reject the IGA as it should be.
One thing is for sure, FATCA is turning me Canadian to my core in a way that nothing else probably could have.
Do not let rage at the bootheel of US statism cause you to start licking the bootheel of Canadian statism. Learn the true lesson.
The Swiss need to get this to referendum and vote NO to FATCA.
In the UK Telegraph there’s a story of a man who suffered from identity fraud and he’s got the German taxman hounding him for £130,000 tax bill. The man has said the HMRC is only play the ‘postbox’ and offers no assistance other than communicating with the Member State.
A quote from the article – HMRC said it was not its responsibility to intervene on Mr Richards’s behalf. “We can support UK residents in how to contact the member country, but cannot get involved in details of whether the tax is correctly applied,” said a spokesman. “If the taxpayer disputes the debt, they have to take that up with the member country and follow the country’s own appeals process.”
So that’s how it’s going to be handled by the HMRC if a FATCA related tax bill becomes due if it becomes collectible in the UK. That’s bul***it.
Here’s the link – http://www.telegraph.co.uk/finance/personalfinance/consumertips/10388791/Our-130000-bill-from-identity-theft.html
Switzerland needs to avoid the FATCA trap.
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And what pray tell, is the ‘true lesson’? Let me guess: ‘Sauve qui peut’?
A political science student could write a Ph.D. thesis on this. What this illustrates his different democracies are. In neither Canada nor the U.S. (at least at the Federal level) could a referendum be used to overturn a decision of the government.
The Swiss site should include the Canadian Green Party as being against FATCA http://www.greenparty.ca/backgrounder/2013-01-28/backgrounder-canada-and-fatca along with their posted info about opposition from the Canadian NDP party.
Maybe European Greens will find the anti-FATCA position to be of more interest and a second look. Particularly in light of the NSA scandals and the surveillance of NON-US persons in the EU – at the very least they should be interested in the data protection and privacy concerns that Sophie in’t Veld has been courageously and tenaciously raising at the EU Parliament http://youtu.be/3uVZiFNkDsA .
@Whitekat, I took it to mean that we must remain vigilant – as citizens of whatever country or ‘state’. Canada does not and should not get a free pass – be exempted from critical scrutiny by comparisons to the US. Canada as a state is not exempt from behaviours on the same spectrum as the United States, just perhaps in opportunity/power/venues/expression. For example http://www.theguardian.com/global-development/poverty-matters/2013/apr/24/un-canada-mining-human-rights
What is wrong with this Swiss bunch. Don’t they know about Obama’s position as Emperor of the World. He’ll be mad at them. Now we need the other 150 countries to rebel and maybe we will get a new emperor.
Badger – Right on. Canada’s willful hosting of global mining atrocity is an excellent example. One more can be wrapped into one word I haven’t yet seen at Brock: Elsipogtog. It’s people of privilege who suck up to whatever state that maintains their privilege. Test (I don’t have the answer): How many Brockers have moaned the cliche thrown under the bus with respect to … Canada.
Articles in Europe on the referendum…
Financial Secrecy Media Monitor: http://financialsecrecymediamonitor.wordpress.com/2013/10/07/switzerland-news-referendum-on-fatca/
Finanznachrichten.de (Germany): http://www.finanznachrichten.de/nachrichten-2013-10/28196449-ch-bankgeheimnis-referendum-gegen-us-steuergesetz-fatca-ergriffen-485.htm
Concerning material in Switzerland (German), here is a list: http://news.feed-reader.net/161698-fatca.html
Article in the NZZ (the conservative paper of the Zurich financial marketplace) about the video by Parti Pirate: http://www.nzz.ch/nzzas/nzz-am-sonntag/fatca-gegner-provozieren-mit-hitler-video-1.18170585
@usxcanada, there is perhaps some leverage to confronting Canadian MPs with the idea/proof/belief/appearance that we as Canadian citizens, residents, taxpayers and voters – that indeed are being”thrown under the bus” by Canada. I’m not saying that this has great power, but sometimes they do have to maintain a certain amount of the shared fiction that comes with their positions. That does perhaps constrain some portion of their words and actions when ethical concerns do not. Elected officials do have to do some minimal damage control and prop up the appearance that the governed and taxpaying public actually has some kind of recourse.
That phrase has power to sway other fellow Canadians when we tell them about what FATCA means. Soundbites work.
The idea of ‘throwing Canadians under the US bus” does draw on historical wounds and potent national myths.
It is hard to say when/how much politicians are swayed by how their actions or course of action appear to the public. Why not use moral/civil suasion? We don’t have the resources of the bank lobby or the US Treasury, so we use what we have at hand. We can’t rely on it to save us, but there is a kernel of truth to the fact that the US and Canada has to maintain a certain facade re Canadian citizens and taxpayers. FATCA and any negative publicity surrounding it is disturbing that facade. Publicity that demonstrates that the negotiators of the Canada US tax treaty have known all along about its shortcomings, and the fatal threat to Canadian government registered savings, Canadian mutual funds, the sale values realized for Canadian primary residences, etc. is also a disturbance of the facade that Canada and the US are ‘friends’. If there wasn’t a problem with the facade (“..There are some people who look at the relationship between the United States and Canada and walk past the flowers searching for the coffin…”) then Ambassador Jacobson wouldn’t have bothered to address it in his now infamous “Canadian Grannies” speech http://canada.usembassy.gov/ambassador/news-and-speeches/18-october-2011-ambassador-jacobsons-remarks-to-the-canadian-club.html
I don’t think we’re gullible enough to believe that the Canadian government wouldn’t sacrifice us to the US for whatever combinations of self interest, financial and business sector lobbyists, trade and other issues on the table, political party interests, etc. I think that it is a reaction against the idea that any country would sell out its own citizens at the behest of another country – since it flies in the face of the essential social contract that purports to exist between the governed and the government. And, because it still doesn’t make sense to me that Canada would want to further any drain on its own taxpayers – which includes the taxes that will go to set up and maintain the implementation of a FATCA IGA, as well as the facilitation of the further and more aggressive drain on Canadian made and sited assets that FATCA represents – and that the ‘reciprocal’ tax treaty does not cover or prevent.
Perhaps the Canadian government has made its own cost-benefit analysis re implementing a FATCA IGA. Or perhaps they are only using the no doubt conveniently skewed numbers that CBA affiliated economists have presented them with (might make a good FOI request?).
We’ll never know the details, and even the opposition parties aren’t telling.
On the other hand, the TPP process and secrecy is what we can expect from our government. We are collectively and wholesale bound, and things are arranged to benefit the few, and the terms are negotiated and signed in secret. It appears that we have no recourse to change this. Canadian governments have sold out the entire country, entire industries and entire groups of inhabitants before. Not that I am saying that resistance is futile.
But I do think that people do have just cause to feel betrayed by two countries, and that it seemed to come out of nowhere.
Regarding *Elsipogtog, I do agree that we should recognize the other shocking betrayal that is going on – that those who are descendants of the first inhabitants of Canada are being denied any power of self determination, and any power to protect their homes and the environment that is their birthright. The homes and water, and environment they seek to protect from fracking is one front on a struggle that all Canadians should act on. Protecting Canada means protecting the environment and the water for everyone http://www.canadians.org/fracking . People in Toronto or Ottawa would not allow fracking in their backyards. Muskoka and Haliburton cottage country asked for (and got?) a moratorium on mining exploration on expensive cottage lands http://www.cbc.ca/news/canada/toronto/ontario-cottage-owners-want-moratorium-on-uranium-mining-1.818004 . Collingwood and the Blue Mountain cottage country is next for fracking as multiple companies have been quietly buying up land in the area http://www.thestar.com/business/2010/03/20/alberta_firm_eyes_ontarios_untapped_shale_gas.html http://www.canadians.org/fr/node/7945 And the Ontaro Ministry of Natural Resources has helpfully drawn attention to Ontario sites with untapped shale gas potential http://canadians.org/media/water/2013/08-Jan-13.htmlhttp://www.ogsrlibrary.com/downloads/Ontario_Shale_Gas_OPI_2009_Nov11.pdf.
*…….”On Wednesday (October 16), the Conservative government presented their much-hyped speech from the throne. In it, they asserted that the founders of Canada “dared to seize the moment that history offered. Pioneers, then, few in number, reached across a vast continent” and “forged an independent country where none would have otherwise existed.”…
One might ask, if this is what the Harper government is willing to do to the original inhabitants of Canada, and the environment everywhere, then why would us being citizens and taxpayers make any difference to what Harper would do to duals of US origin or parentage?
careful about the resource analogy. FATCA does not create itself by Canada or US persons overconsuming anything..
The whole world is afraid of losing the US market. Who will they sell their products to? That is what is at the bottom of all this, plus all the holders of american debt. And this is no small thing. It is easy to thrwo a few expats under the bus when we are looking at a whole nation`s economy. Everybody needs to eat and nobody wants their country to go into a recession. What I dont get is why America doesnt need the rest of the world too?
I simply meant that the Harper Canadian government was not respecting the rights of people whose ancestors were born and formed society here before we came, and in light of that, I should not have been surprised that status conferred to us as a Canadian citizen by birth or by naturalization meant anything to the federal government if they were to choose to sacrifice some group in this society in exchange for some other type of gain or perceived gain – whether in the instance of being ‘thrown under the bus’ re fracking, or ‘thrown under the bus’ re FATCA.
And, the environment, and water is a concern for us all, and a legacy for everyone, yet the Harper government and other levels of governments (ex. the MNR shale gas report) work on behalf of the interests of some particular segments (ex. the energy sector or financial businesses) vs. others with little or no access to lobby them or hire lawyers and other professionals. This is not a democracy if those with means have overwhelming representation and direct and disproportionate influence on outcomes and ordinary individuals have little or none. That is not a surprise to me or a sudden revelation, but I had never had occasion to see it in terms of the problems that FATCA and US interests pose to the Canadian assets of individuals.
The U.S. Government, under the current president whose name I refuse to say or write down, is so short sighted that the one and only thing he can see is wealth redistribution. he misses the fact that we need a sales and service force living in whatever country that would buy our products. The higher tech items needs our people more than ever. FBAR and FATCA makes it impossible for engineers and technicians to live outside the U.S.
My grandson is in Norway, to train as a junior executive, of his employer and must live there for 2 years. With a salary double his U.S. pay he will have a negative cash flow for those two years. As much as 88% of his marginal dollars will go to filling out forms and double taxation.
I have not mentioned the elephant in the room and that is the trillions of dollars on deposit here that are not taxed in their home country. Many banks could collapse if the dollars start being withdrawn to find a safer haven for them. The current administration seem hell bent on the destruction of the capitalist system. The one and same system that made him rich will, if he has his way, be destroyed.
Capital had always found its way to the place where it was the safest with the best return, no more, there will be no safe havens when he is thru and everyone, even the poor will be poorer.
The one and only way to stop this madness is the FairTax, HB25 and S122. It has a low support base in congress but is gaining ground in the grass roots districts. 74 congressmen, mostly conservative, but a few RINO’s and even a few Progressives have cosponsored the house bill and we may see a bill reported out to the full house soon. 60 min gave a very supportive report on this past Sunday evening. The idea is slowly hitting the main stream.
To paraphrase Dr. Kings famous speech. I may not live to see fair taxation, but as a people we will see it and the Mobocracy that rules now will find the ash heap of history.
If every country does what the U.S. is doing about their taxation, the U.S. will be the net looser and I think that is the goal of any fledgling Marxist government. Make everyone poor and dependent, then the perfect Marxist regime can be born. Remember, every despot in history was elected by the Mob who wanted to live without working. Yes, Hitler was elected and he was the perfect Marxist. National Socialism is a brand and the initials N.A.Z.I. are the first letters of a party with the goal in its name. The National Socialist Peoples Party. We see his tactics at work. Bypass congress and issue executive orders. let’s see if he leaves voluntarily when his term ends!?
For me this has become my all encompassing image of America, its consumers, its Treasury, its Congress. We are experiencing its appetite for taxing U.S. Persons around the globe. The FFIs are afraid to stop feeding it. The question is, what is the last “thin mint”?… the Canadian dual Citizen perhaps!
Me thinks it’s time for the “Mythical Candian Grannies” to unite!!