In the eyes of the Swiss, the reputation of the United States of America has for various reasons been in sharp decline, and America has been presenting itself to Switzerland less and less as an old friend, and more and more as an enemy. I want to remind our friends in Switzerland, as well as every American in Switzerland, that the US is a friend of Switzerland, and I want to tell you what the Swiss as friends must do.
The US and Switzerland are two of the worlds oldest democracies, and both share the founding principles of freedom and independence. At the time of the American revolution, Switzerland was surrounded by tyrannical monarchies, and its fierce independence and stubborn refusal to submit to these despots earned it the title of ‘Sister Republic’ to the United States of America.
How things can change. In 2010, the US Congress with FATCA decreed that every bank in the world must report to the IRS, or face severe consequences. This is nothing less than an act of war on the sovereignty of every nation. Switzerland must under no circumstances submit to these threats, and we must as friends tell America that they are out of line. Brute force has replaced enlightened thinking, and the language of threats and intimidation have become the norm of US foreign policy.
Swiss politicians talk of appeasing the Americans to preserve our friendship. Real friends however don’t allow themselves to be bullied or intimidated by their friends. America needs to be brought back to its senses, so that Switzerland and America can sort out their differences as equals. Switzerland must not allow itself to be bullied and treated as a vassal state.
This is why I wish to encourage every person in Switzerland who values real friendship between the US and Switzerland to sign the referendum to repeal FATCA in Switzerland.
The Swiss government recently agreed to enforce FATCA on every Swiss bank. They must report on accounts defined as belonging to ‘US persons’. The US government is however the only one who can decide who a ‘US person’ is, and Switzerland has already agreed to accept all future modifications to FATCA.
This is pure bullying against Switzerland, and were any other country to attempt similar legislation aimed at the US, it would be considered an act of war. The criminal actions of a few Swiss bankers are leading to the subjugation of the entire Swiss banking sector (not to mention other sections of the economy), and Swiss politicians have accepted this with hardly a word of protest.
The referendum to stop FATCA has been launched, and a core group of volunteers is fighting tooth and nail to get the necessary 50,000 signatures before the deadline. It’s a difficult struggle though.
The banks and the large parties are too afraid of the US to mount any resistance, and the average Swiss voter doesn’t yet see how FATCA will affect them personally. By the time they do, it will be too late.
This referendum is a small grass roots movement that needs your help.
Here’s what you can do:
– Go to www.stop-fatca.ch, download the referendum sheet (http://www.lldc.ch/wa_files/referendum_fatca.pdf), and get as many signatures as possible. If you can’t sign yourself (you must be Swiss to sign), find a friend who is willing to sign.
Then send the sheet to:
FATCA
Le Lobby des Citoyens
Rue du Conseil-Général 20
1205 Genève
Please try to send your letters before 16 December. The holiday season means that most communes will be closed, and it will be very difficult getting the signatures validated in time for the 16 January deadline. Every signature counts though, so keep them coming until the very end.
If every American in Switzerland could just get one or two signatures, we’d easily have enough signatures, and we would be making a giant leap towards killing FATCA for good.
– We need every volunteer who is willing to help us. We are working hard and setting up stands to inform people and to collect signatures. But we need help. If you have the time, and are willing to stand outside in the ever colder weather, we’d love to have your support. Send an email to: info@lldc.ch or call 022 807 08 32 to find out more.
– Contact your local representatives and political leaders and ask what they are doing about FATCA. The large Swiss parties have sold out the country to protect the interests of the large banks. They are hoping this law will pass unnoticed. We need to make some noise and stir things up.
FATCA is a steamroller coming down on the world economy, and Americans abroad are going to be this law’s first victims. We can choose to fight and stop FATCA in its tracks, and if we work together we will succeed.
Spread the word to as many people as possible, and good luck!
Richard
@MedeaFleecestealer, thanks for the update. I guess I’ll be doing 2013 taxes earlier to qualify for “fully compliant”, whatever that means and for whom.
For those like me who haven’t been following the intricate details of the Swiss situation as closely as others, and don’t quite understand what is going on with the Banks decisions about the Swiss OVDP, this explanation sent to me really helped… I am passing it on for those that might be interested.
They wrote:
The big controversy here is that in August the Swiss government announced that they had negotiated an agreement with the US DOJ that allowed Swiss banks to get the whole issue behind them, by handing over info on undeclared accounts and paying a fine of a percentage of the total of those accounts.
The fine is fixed at 20% of the total of undeclared accounts opened before August 2008, 30% of the total of those opened between August 2008 and February 2009, and 50% of accounts opened after that. The fine would be reduced by the amount of the fine already paid by the US person through the OVDP, if the bank could prove that the US person entered the OVDP at the instigation of the bank.
The banks were supposed to be able to identify themselves to the DOJ in one of four categories – number one is those 14 banks which have already been indicted and are working with the DOJ to hand over info, number two is those who have a considerable number of undeclared US clients but who have not yet been indicted, number three was supposed to be those with few US clients, and number 4 was local banks with virtually all Swiss clients.
The problem is that the program as defined in August was so vague and unclear that the Swiss banks wrote to the DOJ and asked for clarification (BAD idea), and in the comments the DOJ sent back in early November, they specified that even ONE undeclared US client meant that a bank had to declare itself as being in category two, not three or four.
When you know how many accidental Americans there are in Switzerland, it seems totally impossible that any bank in Switzerland can guarantee that it didn’t even have ONE account of someone who turns out to be a US person in addition to having a Swiss passport with which they opened the account.
Meaning, there is no possibility to be in 3 or 4. Every bank will have to identify themselves to the DOJ as category two, will have to go through every single account to identify people with a second or third passport which happens to be US, and will have to pay a percentage of the total of those accounts as a fine to the US.
The banks are now accusing the Swiss government of not knowing what they signed, and basically of betraying the banks. Which they did. The government is desperate to get the US off their back, and so are the banks, but this program is so over the top as to be unimplementable (sounds like FATCA in the first place), so the banks are now debating how they can just wash their hands of the whole thing and declare that they won’t participate. Would the US go so far as to indict every single Swiss bank ? Cut off the USD accounts of every single Swiss bank ???
There are still thousands of Swiss bank employees who will not travel to the US for fear of being stopped at the border, at least for questioning if not for arrest, and most banks here actually formally forbid top level employees from travelling to the US, even for vacation, if they had the slightest contact with undeclared Americans, even if it was in a role of getting the American to declare their account.
The image of the United States has been SERIOUSLY damaged in Switzerland by this American overkill. I am in touch practically every day with at least one and sometimes several accidental Americans who are in a panic because they’ve never declared to the US and they are now hearing about horrendous fines and penalties being imposed on people such as themselves.
I still do not in any way understand how the IRS can possibly follow up on each and every account which is coming forward from accidental Americans, not just in Switzerland but worldwide, with the limited man- and woman-power, funds, and time that they have. I can only think that for cases under a certain amount, they will just drop it, otherwise the whole process could last the next twenty years or more.
And for what ? Peanuts !!!
Anyhow, that’s the gist of the Swiss situation. Frustration, anxiety, fear, bitterness, recrimination. What other adjectives could I use ?????
To which a friend replied…
Has the Swiss government gone completely mad? What on earth are they thinking permitting the IRS to punish ALL Swiss banks for acting entirely correctly under SWISS law? I’ve always been under the – obvious illusory – impression that the purpose of governments were to protect their citizens and businesses against external threats, and to especially defend the issue of sovereignty within their own borders against all who would attempt to impose extra-territoriality against its citizens and businesses that are contrary to issues of sovereignty and common sense and common good. How can ANY Swiss official see FATCA in this light at all? Why would ANY country – let alone Switzerland – permit the IRS to impose its own interpretation of issues of legality on Swiss entities, especially when according to Swiss law they have done nothing wrong??
I simply am baffled! Is everyone in Bern smoking pot?
the response
UBS blew the entire Swiss banking system out of the water because they WERE breaking US law – they were actively marketing their services of tax evasion to US citizens inside the United States, they were seeing people inside the US, they were transporting cash across borders into the US, they were setting up structures to hide the identities of US citizens .
So when our friend Birkenfeld blew the whistle on UBS, the US obviously decided that every bank in Switzerland must be doing the same thing as UBS, which they weren’t.
Bern is desperate to stop the United States’ war of attrition on Swiss banks, but they’re bending over backwards to come to an agreement, and they keep on being surprised by the ongoing never-ending demands of the US.
I don’t entirely blame Bern, they’re trying to deal with a horrible situation, but the agreement is so bad that instead of being an “agreement” allowing banks to get out from under US pressure, it’s turning out to be a system to bring down just about every bank.
There will be a radio program to be aired tomorrow, with a Bank official I know, saying that from a strictly legal point of view, banks who have only a few undeclared US clients can refuse to participate in this “agreement”, and they can defend themselves very well in a US court since the US is accusing banks of CONSPIRACY located inside the United States, as UBS was doing, and most banks weren’t doing that at all.
This goes on and on and on and on …..
@Just Me, thanks for that. It helps make things a bit clearer if anything can be in this crazy situation we find ourselves in.
@SwissPinoy, it’ll be interesting to see if I get a similar letter from UBS. They already know I’ve renounced and have a copy of my CLN, but the OH suggested leaving telling PostFinance until they came calling. However, UBS have no idea whether I’m tax compliant or not. But then they’re already a category 1 bank; PostFinance isn’t as far as I know.
@MedeaFleecestealer
I keep referring back to the the letter you received from PostFinance. I find it extremely disturbing. PostFinance has embarked upon a fishing expedition in trying to determine whether you pose a threat to them or not. If you don’t respond, can they assume that you are US tax compliant? I think not. They’re running around like a bunch of chickens with their heads cut off. If Canada doesn’t watch it, it too will find itself in the same position, down the slippery slope into perpetual uncertainty with the US calling the shots…
@just me
That insight into what’s happening in Switzerland is as interesting as it is frightening as a prediction of what might happen to any nation that allows the US call the shots in its banking system. Thank you for passing it on. Heaven help us.
@bubblebustin, I don’t think they’ll assume anything. They already know that I am/was a US citizen because when we changed my husband’s account with them to a joint one a few years ago, they took copies of my Swiss permit and US passport. However, I’ve never had a waiver/W-9 form from them as I had from UBS.
I think it’s more to do with this paragraph from Just Me’s posting about the fines the banks will incur:
“The fine is fixed at 20% of the total of undeclared accounts opened before August 2008, 30% of the total of those opened between August 2008 and February 2009, and 50% of accounts opened after that. The fine would be reduced by the amount of the fine already paid by the US person through the OVDP, if the bank could prove that the US person entered the OVDP at the instigation of the bank.”
They’re trying to get any fines against PostFinance reduced as much as possible by encouraging clients to enter the OVDP. By getting copies of the IRS acceptance letter or the closing agreement, they can prove that clients joined the program at PostFinance’s instigation, thereby reducing any subsequent IRS fine against PostFinance.
What is the definition of “undeclared US client”? Declared to the US? Declared to the Swiss tax authority? Declared to the bank? Declared to some other entity? Declared now but not then or then but not now? Declared by former US or former non-US? Undeclared baby? Unknowingly undeclared? Knowingly undeclared non-tax-cheat? Undeclared due to low or non-balance? Undeclared since one doesn’t own the funds? Undeclared since the concept of declared is undefined?
@bubblebustin, basically, Postfinance is guilty American tax cheat unless proven otherwise, since Postfinance did the utterly stupid thing of helping US indica to pay their taxes with a local checking account. So, if Postfinance does not prove that its clients pleased the US empire, then the US will shut Postfinance down so that its middle and lower class staff can sleep under a bridge when not begging for coins.
I wouldn’t worry so much about Canada, though. America desperately needs to destroy Switzerland to scare Canada into FATCA. So, once Switzerland has been totally destroyed to set an example, Canada will crawl to the US and kiss its feet prior to paying obedience fees.
PF never declared to USPs of their Anlagefonds as being PFIC. Instead they sold them as “gut, gelb, günstig”. Those fees cashed in (and shared with UBS, from whom the funds were white-labelled) are the quite a hefty sum, and I assume were also undeclared – neither to the SEC nor refunded to customers as Retrozionen …
@SwissPinoy,
No way. There are too many ‘US persons’ here in Canada, most of whom are still asleep. When they wake up. all hell will break loose.
@MedeaFleecestealer
I would think that sending an OVDP acceptance or closing letter is not proof positive that the customer entered the program at the behest of the bank. The IRS might agree if they’re cash hungry enough and don’t give a hoot about the bank’s survival.
@NotThatPF
I don’t know what “gut, gelb, günstig” means, but I’d guess it’s something similar to what US banksters told investors their mortgage backed securities were prior to the 2008 global recession. Was the non-disclosure intentional?
I saw the market organizer today when I rode though the old city to buy something. He said that they don’t like political stuff near the market, but one could collect signatures at Coop or McDonalds if the property owners there gave permission for it. I don’t know how many people pass by there.
@ WhiteKat
Hope you are right. Cdns need to join IB Society advocacy against an IGA and get GoCda to start thinking about retaliation in the negotiations. Canadian primary payments (dividends and interest etc) to USA approach double USA primary payments to Canada if you want to start thinking about withholding.
Re; ….”The fine would be reduced by the amount of the fine already paid by the US person through the OVDP, if the bank could prove that the US person entered the OVDP at the instigation of the bank…”
This refers to Swiss banks, but equally valuable as a heads up to US tactics and incentives offered – which no doubt will be employed in other countries at the behest of the US as well.
Just proves you can’t trust banks. Their self interest trumps all other considerations. That is an important lesson for Canadian citizens and tax residents of Canada to apply when our bankers talk about FATCA and US tax compliance too.
@badger
A Switzerland goes, so goes the world?
@bubblebustin
I think so, and that is why we should show an interest in what is playing out there. If they can do to Switzerland what the Nazis never did, then you have to take note! Countries might has well fire all their financial Regulatory agencies, and just have the U.S. do it for them. The U.S. law and regulations are becoming the world default through these tactics.
Here, this will stir the Swissies up…
As FATCA nears, US is accused of hypocrisy in attacking offshore secrecy while keeping its own
Maybe the Swiss Government should impose an OVDP for U.S. Financial institutions…
@Just Me, ha, good one! I can just see all those Congress prats bleating about how Switzerland’s trying to impose their laws illegally on the US. What’s good for the goose …
Tomorrow from 16h I’ll be hosting a stand at the farmers’ market in Visp. If you aren’t too far away, drop by!
The Swiss French-language newspaper “Les Temps” has an opinion editorial by Douglas Hornung, an attorney, who advises Swiss banks NOT to take part in the “plead guilty deal” agreed between the US and Swiss governments. The opinion piece is titled “La majorité des banques suisses doit refuser le «US Program»” and is behind a pay-wall.
Below is a rough translation of the first paragraphs:
“Only banks that have actively solicited clients on American soil have an interest to participate. Bankers who take the time to learn will learn the intricacies of “U.S. Program ” that Swiss diplomats have not seen.
by Douglas Hornung
More and more banks are considering whether to participate in the U.S. “Program” and FINMA , the Federal Supervisory Authority for Financial Markets, is applying pressure to convince banks to participate in the “U.S. Program .” The Swiss authorities and the Swiss Bankers Association emphasize that banks that fail to participate in “U.S. Program”, are liable to criminal prosecution for “conspiracy” that threaten their very existence. The example of the Wegelin bank is highlighted.
In fact, this fear and this example are ruled out: in fact, the United States can not threaten to open a criminal investigation “conspiracy” against most Swiss banks. They can not do that against those who actually had a policy of attracting a major U.S. customer and have in that particular efforts to have this type of clients. In these cases, but in these cases only the United States can put the bank itself at risk by threatening criminal prosecution for “conspiracy ” if it does not cooperate.
For all other Swiss banks , there is no reason to fear of being accused of “conspiracy” because they have nothing ” conspired ” and have only managed the assets of some U.S. customers, often elderly, who represent only a small part of their regular customers. They have not had proactive activities on American soil (organization of cultural events, sports) and have been content to treat clients who come to them naturally. They could also defend themselves vigorously, and successfully, in case – although unlikely – that such a threat materializes.”
@Innocente
Do you have a link to that?
BTW, James Jatras just sent this which I thought I would share….
In case our Swiss friends haven’t seen it yet, below is a proposed resolution to the Republican National Committee (which is the policy bureau of the Republican Party) urging FATCA’s repeal. This could be a major milestone in getting FATCA repeal into a tax reform package, especially if the GOP both holds the House (virtually certain) and even better if the Senate is captured (a good bet, but never trust the Republicans not to screw it up).
Also posted on Brock: http://isaacbrocksociety.ca/2013/12/06/proposed-rnc-resolution-has-been-drafted-titled-resolution-to-repeal-fatca/
This is NOT grounds for complacency for our CH friends on the referendum. To the contrary, I hope it shows people in Switzerland both that trying to get rid of FATCA is not quixotic and that any weakening of FATCA in other countries – like Switzerland – will resonate here.
Also note (posted on Brock as well) the news that the FATCA website – to which CH banks are supposed to sign up – is a mess, like the Obamacare site:
http://isaacbrocksociety.ca/2013/12/06/sit-tight-even-the-irs-is-not-ready-for-fatca-boondoggle/
That’s on top of the risk of deliberate data harvesting for intelligence purposes: http://www.repealfatca.com/index.asp?idmenu=4&title=News&idsubmenu=137
Please get these developments to CH media to help with the referendum drive.
For those who may not know, Douglas Hornung is the husband of American Citizens Abroad’s finance director, Anne Hornung.
Swiss banks should listen up when the spouses of prominent members of a non-partisan American advocacy group speak out against US policy.
I haven’t found the original link yet, but see it was reported here…
http://www.24heures.ch/economie/Conflit-fiscal-le-programme-US-reste-flou/story/14109440
Google Translate:
Speaking on Thursday in an article published in the daily Le Temp s Geneva-based businessman Douglas Hornung lawyer also recommends a majority of banks refuse program. In his eyes, it is only useful for institutes with really sinned scale or forty institutions.
According to Mr. Hornung, the United States can not threaten to open a criminal investigation “conspiracy” against most Swiss banks. They can not do that against those who had a policy of attracting a major U.S. customer and having the sense made special efforts.
Fuzzy program
“Neither reasonable nor fair”, this operation is not in the interest of banks and aims to U.S. domestic law applicable in Switzerland, says Mr. Hornung. And counsel to criticize a program that blur does not know exactly what institutions are exposed, among others.
The U.S. concentric view…
Swiss banks prepare to bow to U.S. demands, grudgingly
http://www.reuters.com/article/2013/12/05/us-usa-tax-switzerland-idUSBRE9B40ZY20131205