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”]
BANKING SECRECY
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.
Twitter @StopFATCA
Link to original posting on IBS regarding the referendum.
The Canadian government says that it respects the US’s right to tax its citizens, time will tell if it supports this right more than it does the rights of its own citizens. It’s a Sophie’s Choice like situation – neither one’s good, but one’s less good than the other.
@bubblebustin, Shouldn’t part of the ‘respect for USA to tax its own citizens’, also take into consideration the meaning of ‘citizen’? Someone who has lived outside of USA for decades with no memory of living in USA, who has never been schooled in USA or worked in USA or voted in USA, and has no family ties to USA is hardly representative of what most people think of when they hear the term ‘US citizen’. Citizenship implies a life intertwined with USA, and something more tangible than just the physical act of having been born there. Canada may as well say that it ‘respects the USA’s right to tax its SLAVES’ because US citizenship is just a nicer term for ‘US slave’, but it means the same thing.
@UncleTell
I think we have some here! 🙂
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@WhiteKat
It’s sad. Your US citizenship is the ‘anchor’ part in being an anchor baby. I was 12, and as it turns out I am a citizen at birth of both the US and Canada, yet I feel under siege by the US and less than fully protected by Canada. I’m trying to imagine having no recollection of living in the US yet still being claimed by it, how that might feel. I can’t imagine the US being completely alien to me and still be enslaved by it, as it is in cases like yours and the cases of others who were born abroad and registered as US citizens at birth. I could live without feeling as though I’ve been betrayed – something unique to those who may have had some attachment to their US citizenship.
@All
FYI: Mohammad Farrokh’s story in Bilan about the CH referendum is up on OpEdNews, top hit on a Google News search for “FATCA”:
http://www.opednews.com/articles/News-from-Switzerland-A-R-by-James-Jatras-Democracy-In-Action_Direct-Democracy_Finance-Banking_International-Democracy-Efforts-131021-703.html
The posting shows “by” James Jatras because I posted it, but it’s clear it’s from Bilan.ch with original link and French title, authored by Mohammad.
Our homes are so taxed by local authorities that we may as well not own them and just rent them from the 22 taxing authorities who tax us so greatly.
The things we buy have sales and other taxes and are loaded up with the cost manufacturers must load into the price as well as the cost of tax accounting making the products cost 30% more than they should.
Our incomes are loaded with taxes, City, County, State and Federal Income Taxes. We cannot deduct all our costs but must declare all our incomes. Payroll taxes, employers and employee’s share amount to 15% of our salaries.
Politicians try to hide all the taxes so they can live like Kings whilst fleecing the peasants.
There is only one way to beat all these taxes, death or revolution or both. Maybe another way would be the FairTax that the Ways and Means Committee has kept bottled up so it cannot get passed and do them out of their extorted campaign contributions. If anyone is interested, google the FairTax and see how great an idea it is. It solves the Americans living abroad’s problem. It solves the tax evasion problem. It solves 20 million drones who suck the life out of the rest of us doing tax work that doesn’t need doing. It solves the capital problem, bringing money home is tax free for the multi nationals.
It won’t breast feed the children, but almost everything else, it does do.
@Wilton Tidwell
Just wanted to say thanks for posting comments here. I have seen your name around the internet on comments on WSJ and NYTs, so pleased to see you have decided to add input here.
Your ideas and thoughts are a welcome contribution and increase the spectrum of opinions express on Isaac Brock.
Are you sure the Fair tax won’t breast feed children? 🙂 Or will it force the government teat suckers, the Tax Compliance Industry to find another source of nourishment?
Here is the Fair Tax web site you speak about.
http://www.fairtax.org/site/PageServer
For those who don’t know what the Fair Tax is, and want a serious presentation without hyperbolic videos this lecture probably explains it best.
http://youtu.be/6szslYYlRr8
Via….Innocente says
October 22, 2013 at 8:42 am
The Swiss “Blick” newspaper has an article today on the anti-FATCA video produced by “Le Lobby des Citoyens”, translated below. Blick is a high-circulation, quick-read newspaper published in German-speaking Switzerland:
http://translate.google.com/translate?sl=auto&tl=en&js=n&prev=_t&hl=en&ie=UTF-8&u=http%3A%2F%2Fwww.blick.ch%2Fnews%2Fschweiz%2Fwestschweiz%2Fwelsche-politiker-vergleichen-obama-mit-hitler-id2484018.html
The Guardian: New EU rules to curb transfer of data to US after Edward Snowden revelations
“Regulations will make it harder to move European data to third countries, with fines running into billions for failure to comply”
http://www.theguardian.com/world/2013/oct/17/eu-rules-data-us-edward-snowden
Perhaps this may throw a monkey wrench into FATCA.
No wonder the current administration has demonized Snowdon. They knew he would queer their plan to rule the world by subversion of all the capitalist countries.
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Badger –
In fewer words. Confront the powers everywhere and always, yes. Huzzah for the Elsipogtog solidarity.
Dear Citizens,
We have good news for you:
According to tweets, the national section of SVP/UDC have decided in general assembly to support the referendum. This is the first large national party to officially rally the STOP-FATCA movement.
MCG, a party of Geneva, has sent the referendum sheet to all households in the city, inside their own magazine.
The single party with the highest percentage of votes in Switzerland.
http://en.wikipedia.org/wiki/Politics_of_Switzerland
https://twitter.com/FATCA_Fallout/status/394186374561034240
https://twitter.com/FATCA_Fallout/status/394186940070625281
https://twitter.com/FATCA_Fallout/status/394187662560460800
https://twitter.com/FATCA_Fallout/status/394188385020956672
Thanks Just Me for keeping us up to date with the latest. does anyone know if they received the 50k signatures required? And most importantly should once 50k signatures are obtained does it automatically roll into a referendum nationwide?
I wonder is this could this delay the current swiss special disclosure program/debacle?
This is fantastic news! If the UDC/SVP put their weight behind this, I’m sure we’ll get the 50,000 signatures. And yes, once we have the signatures the whole country votes, and no politician can overturn what the people decide.
@FATCAL
I know they were out in the streets on the weekend gathering signatures, and apparently were getting favorable responses with folks aware of FATCA, unlike in the States, where all you would get is, Huh?
I will see if I can find more information…
We are such a large country and as the poem on the base of the Statue of Liberty says–give me your refuse— and they did. The average IQ for the U.S. is much lower than any of the European Countries except Russia and far lower than the Far East and Middle East, so it is no wonder that 60% never heard of any laws that are so bad for the world.
We have descended into a society who are just interested in today and can be sold on voting for the likes of our current government, who are only interested in getting re elected and will promise stuff being given to them. They never look at where it comes from, just give it to me now.
When you mention anything about the administrations wrongs, they get angry and quote the democrat talking points, that are so pointedly untrue and stupid, the conversation is basically over. We are ripe for dictatorship, which is the goal of the “Party of Government” as Lenin and Stalin saw in Russia in the early 1900’s and took full advantage of.
The FairTax is our only hope of staying a “people governed” nation. Smaller more efficient government would follow and that is against the democrat model.
@ Just Me
You are absolutely spot on, and thanks again for your updates.
Appreciate your postings with this especially if you hear anything as it relates to the special Swiss disclosure program.
@Fractal…
Of course, this referendum has no impact directly on the Swiss Bank(s) disclosure program, but if the FATCA IGA was voted down, it would be a stinging defeat for Treasury and could have some impact on the margins maybe…?? Might stiffen some bankers resolve to not be extorted by Treasury?
@AJ
“…… , and no politician can overturn what the people decide.”
I wish it were that simple, but do you remember what happen back in 1978 and 1980?
http://www.tell.ch/schweiz/sommerzeit.htm
For the vote of SVP/UDC at national level in favor of STOP-FATCA, this was posted on the website of the Wallis section:
http://www.udc-valais.ch/?p=4685
Hello Everybody,
I am responsible for The Lobby des Citoyens, member also of the referendum comittee
Sorry to refrain your enthusiasm but it seems tha the message send by the section Valais of the SVP was too cheery. After investigation, It seems that the national direction of the party has not changed a iota from its initial position which was to set aside of the FATCA case. Christop Blocher the most influent member of that party has may be some interest to defend and is not willing to fight for the Swiss rights versus the US.
Its local sections urges him the head of the party to allow them to fight against FATCA. The party was embarrassed and finally agreed to let the section go their way if they wnant it but warned them that they would’nt get any monney to do so.
So the news is not as great as it appeared at the beginning.
I want to thank here all these people in the SVP sections who are helping us as much as they can.
But the way is till long until we get the sufficient signatures, in a environment where the big banks as holding the country as an hostage and are playing a very bad game for the country.
Best regards
Marc
@Marc…
Thanks for the update, and coming and posting it here. We all follow this with keen interest, and anything we can do to assist spreading the message of the referendum, please let us know.
@Studer Marc,
We here at Brock are sending good vibes your way, in hopes that the tide will soon turn in your favour.