This post appeared on the RenounceUSCitizenship blog.
Basking in the glory of OVDP and the FBAR Fundraiser for Individuals:
The Department of Justice Announces OVDP for Banks!
DOJ announces new #OVDP program for Swiss banks that allowed US clients http://t.co/JM99xytMt7 – Banks pay fine based on % of deposits
— U.S. Citizen Abroad (@USCitizenAbroad) August 30, 2013
On August 30, 2013 the U.S. Department of Justice created a voluntary disclosure program for Swiss banks. It was clearly premised on the OVDP program for people. My post describing OVDP for banks ended with:
The possible next step …
The U.S. is clearly on a mission to confiscate assets throughout the world.
In the beginning, there was OVDP for individuals.
Now we have OVDP for banks.
Coming soon, OVDP for financial advisors.
Soon, we will all become Whistleblowers.
The solution to this is for the U.S. to simply absorb all the other sovereign nations of the world. Once we become one country, there will be no more “offshore accounts”. But, how would fines be imposed then?
The practical implications of OVDP for banks
What the IRS #OVDP program for Swiss banks means in practice – Same thing it means for anybody else in #OVDP http://t.co/92k6FhnxvN
— U.S. Citizen Abroad (@USCitizenAbroad) December 7, 2013
Just me posts the following comment at The Isaac Brock Society:
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 …..
Frightening isn’t it!
But, of course innocent Americans abroad must pay the price to help the banks!
Swiss Banks ending year with letters to #Americansabroad clients http://t.co/Mxwznao2d6 – Be #FBAR and #FATCA Compliant or Be Gone!
— U.S. Citizen Abroad (@USCitizenAbroad) December 7, 2013
A recent blog post at Geneva Watch includes:
The onus falls on any US tax person who has had a Swiss bank account since 2008 to show that he or she has paid US taxes. The group, according to Lachowitz, may include people who renounced their citizenship during or after 2008.
The problem is how to show a bank, on short notice, that taxes were indeed filed – how to know which of the myriad IRS forms should be shown to the bank, although many banks are reportedly sending out form letters requiring copies of a dozen papers and tax forms, including attestations about the tax filer by an attorney or registered accountant. And how to know what information from elsewhere you can safely share with your bank.
One of the requested forms is often the FBAR, where Americans’ foreign bank accounts are listed; note that since July 2013 these must be filed with the US electronically.
Lachowitz’s advice, should you receive one of these letters from your bank? “US Taxpayers who have foreign financial accounts basically fall into two categories; those who are tax compliant in the US and those who will soon become tax compliant in the US. If you fall into the second category the advice has been, and remains, please go and see a tax attorney [immediately] who can help you decide how to become tax compliant. There are various ways, it will cost you some money, hopefully not too much, but you need LEGAL assistance, not just a CPA.”
This is what happens to all people and entities who enter into ANY OVDP agreement with the United States!
Yes, the countries of the world are considering into FATCA IGAs.
#FATCA update from Germany from todundsteuer http://t.co/tGePEiO4EC
— U.S. Citizen Abroad (@USCitizenAbroad) December 1, 2013
I guess nobody ever told these government officials that:
A FATCA IGA is an OVDP program for countries!
The @USTreasury announces the #FATCA IGA – A new #OVDP program for countries! Coming soon to a country near you! http://t.co/xL0lgtFi7W
— U.S. Citizen Abroad (@USCitizenAbroad) September 29, 2013
Here is why!
As I wrote in an earlier post:
OVDP as an instrument of confiscation
One of the most effective instruments of the confiscation of assets has been the OVDP program for individuals.
Recognizing the success of the OVDP programs for INDIVIDUALS, the United States created an OVDP program for Swiss banks.
Now the U.S. Treasury announces FATCA – The OVDP program for countries!
What Treasury calls a FATCA IGA is really an OVDP program for countries!
FATCA is a tool to enforce citizenship-based taxation. By allowing U.S. citizens (Trojan Horse soldiers) to reside in a country, that country is agreeing to allow the United States to claim a share of that country’s GNP.
Example: Sell your house in Canada and send a share of the proceeds to the U.S.
To put it simply:
Citizenship-based taxation is a way for the U.S. to plunder the economies of other countries.
Let’s consider how the IGA works. Under a FATCA IGA a foreign (Offshore) country agrees to (Voluntarily) locate U.S. citizens in that country and inform the IRS(Disclosure) under a specific set of rules (Program). In other words:
A FATCA IGA is really an:
Offshore Voluntary Disclosure Program for countries.
Under an IGA, it is NOT the individual who makes the Offshore Voluntary Disclosure.
Under an IGA, it is NOT the banks who make the Offshore Voluntary Disclosure.
Under an IGA, it IS the country that makes the Offshore Voluntary Disclosure.
Countries “in effect” calculate their own penalty by allowing the U.S. to impose citizenship-based taxation in their countries.
Like the Offshore Voluntary Disclosures by the banks and the individuals, the Offshore Voluntary Disclosure by the country is at the expense of the country. By disclosing the accounts of the individual the country is in effect “calculating its own penalty”.
Does the rest of the world really believe that it should voluntarily, at its own expense, allow the wealth of the nation to be confiscated by the IRS?
This is a good question to ask Mr. Flaherty and Mr. Harper while they are considering whether to enter into a voluntary disclosure agreement – FATCA IGA – with the U.S. government.
Oh and have you heard?
The number of Americans who have renounced their citizenship or residency has increased tenfold since 2008: http://t.co/G9qLyg7xXy
— ICIJ (@ICIJorg) December 6, 2013
But of course nobody understand how this could be happening …
Some even say (if you believe they are being honest that)
The mystery of the fleeing Americans – help ICIJ dig into the skyrocketing number of citizenship renunciations: http://t.co/RGZSmj4lTq
— ICIJ (@ICIJorg) December 6, 2013
Actually U.S. citizens are renouncing to protect themselves from the U.S. government.
The results of this poll (in case you missed it at the top) tell the story:
What’s next? Will the US realize, again, that one size does not fit all, and in their usual bi-polar fashion allow nations and foreign banks to then “opt out” of their OVDP’s, as they now allow individuals to do?
It’s America’s world, we just live in it.
As usual, you put the narrative together VERY well, and are so correct! and they all clamor to comply…
See this comment…
Innocente says
December 7, 2013 at 6:44 am
The print-edition of the Handelszeitung (HZ) has an interview with the Paolo Cornaro (PC), CEO of Corner Bank, a credit-card bank in Switzerland. He seems to indicate that the tax deal between the Swiss and the US governments is more about extortion than about an agreement (translated):
“HZ: The US tax dispute is further along. How do you judge the agreement?
PC: This program, which I cannot characterize as an agreement with good conscience, strikes all banks as a block. It does not make a distinction between banks which consciously went on American soil to acquire customers and those banks, to name an extreme example, that opened accounts for two Swiss who were also coincidentally in possession of US citizenship. We know today which banks are Category 1. Since we never actively pursued American customers, we should be in Category 3. With this view, however, we are exposed to the risk in the event that documentation is not water-tight that we would have to accept additional liability.
HZ: You must decide no later than December 9?
PC: It certainly could happen that there are banks which will not be so far. We will classify ourselves in Category 2 in order to avoid further discussions and risk a penalty. We have American customers who are properly declared. The program’s concept is however that all are tax evaders. Then we must prove that this is not the case.
HZ: What kind of penalty are you looking at?
PC: I cannot and do not want to mention a number. We want to close a chapter by paying a penalty and then can we look forward again.
HZ: You will pay in order to have peace and quiet?
PC: Yes. We found ourselves in a similar situation in connection with the “unidentified accounts” matter. Our bank was founded in 1952 so there was certainly no unidentified accounts coming out of the war. We decided to pay anyway. Towards the end of the matter the actions were directed at all Swiss banks. If we wanted to continue with a US dollar clearing account, we had to pay. It didn’t matter whether we were guilty or not. We booked the payment as a solidarity contribution. Also at that time we wanted to simply conclude the matter.”
Do they really think this just conclude the matter so simply? Extortion at a grand scale.
as James Jatras so eloquently said…
The US Dollar is dangerously close to becoming a banana republic currency, losing its status as the worlds reserve currency. We all know this. This is their answer, take control of all foreign banks and threaten not to deal with those who don’t allow them to take over the world. US citizens are simply the pawn in a much bigger game. The US has now declared war on its own citizens resulting in an attempted takeover of the world in order to try to insure the status of the USD as the worlds reserve currency. Hitler dreamed about this but the mechanisms were not in place. Due to the age of computers it can be easier to accomplish. One wonders if this was a goal of Prescott Bush (grandfather of Dubya) when he funneled money to the Nazis through Brown Harriman Bank
http://www.infowars.com/print/Bush/grandfather_helped_nazi.htm
http://www.infowars.com/obama-the-2-0-dictator/
China’s Official Press Agency Calls For New Reserve Currency, And New World Order
http://www.infowars.com/chinas-official-press-agency-calls-for-new-reserve-currency-and-new-world-order/
“Does the rest of the world really believe that it should voluntarily, at its own expense, allow the wealth of the nation to be confiscated by the IRS?”
That’s pretty much the same point I brought up in a letter (and homemade Christmas card) I mailed to Mr. Flaherty on Friday.
If Canada goes down the same road to appeasement and capitulation as Switzerland I would consider renouncing my Canadian citizenship and becoming stateless. That amount of betrayal would be too hard to bear. A country which would bow that low in obeisance to the U.S.A. deserves no respect or loyalty. Our national anthem invokes us to stand on guard for our country but if our government decides to stand on guard for the U.S. tyrant and not for us then that would be a major game changer for me at least.
Those are pretty strong words, Em. It’s all become quite surreal. I too am becoming sick to death of something most of the world doesn’t even know about yet. Opposition isn’t even close to gaining critical mass yet – I just hope that when it does, it’s not too late.
@ bubblebustin
Some people think Harper will IGA our lives away to get the XL pipeline but I wonder if all it would take is the IRS offering the CRA a percentage of the take — a finders and collection fee, so to speak. We might not even know this is part of the deal since everything is all about secrecy these days … like the TPP for instance. Boy do I have dark thoughts today!
Every minute, of every hour, of every day, a major financial institution is under attack.
http://www.infowars.com/big-banks-are-being-hit-with-cyberattacks-every-minute-of-every-day/
MUST READ IN MY OPINION……SHOCKING
CheeseBigEars, thank you for the information but, Alex Jones is not really considered credible by most news outlets, journalists or individuals. He gets some things right about a third of the time but, discredits himself on those counts by being wrong and over the top on others.
Much in the manner that Michael Moore does documentaries. He makes some good points but, bends facts so often to make them that he discredits himself in doing so.
So, how many Canadian financial institutions are harboring accounts of so-called “US persons”? Make a conservative estimate. According to Canada’s 2006 Census, 316,350 Canadians reported American as being their ethnicity, at least partially.
How many of those 316,350 have any kind of financial account in Canada: chequing, or savings account, RRSP, RESP, mutual fund investment, company pension plan, joint account? A conservative assumption: 75%.
Assuming 75% of the Canadians reporting American ethnicity have some kind of financial account = 237,244 accounts. Of course, this is a conservative estimate; bank accounts are so essential to day-to-day living in Canada that “Access to Banking” is a legal right. And many individuals have multiple accounts for savings, investing, retirement, education, small businesses, etc.
Under the foreign law FATCA, these hundreds of thousands of accounts are potentially illicit and a legal hazard to the institutions harboring them. Even if they contain money earned, in Canada by a Canadian citizen, reported to the Canadian Revenue Agency, and taxed in Canada, if the account holder was born on US soil, it is now an “offshore financial account” and the financial institution has a FATCA problem.
In reality there are far more than 316 thousand so-called “US persons” in Canada; and probably more than 1 million Canadian financial accounts that would violate the foreign law FATCA. Compared to Canada, Switzerland is probably an “also-ran” in any kind of “Undeclared Offshore Bank Accounts of US Persons” contest!
How will Canadian financial institution identify these accounts, assuming the account holder lives and works in Canada, has a Canadian address, opened the account with Canadian ID, the source income is Canadian, the account holder has a Canadian SIN, and is a Canadian citizen or lawful permanent resident? Asking national origin or place of birth is unlawful, according to the Human Rights Act that governs federally regulated banks. And any kind of sideways move to make a determination of national origin remains “fruit of a poison tree”.
If any journalists are reading: this is a BIG story. Under FATCA’s definitions, Canada – not Switzerland – is likely the world’s largest offshore banking centre for so-called US persons! Who’d have thought?
Thinking about FATCA this morning and the argument as a US citizen you receive help from US embassies abroad and therefore it’s justifiable for the US to tax you abroad because of these services you receive.
Well in the case of dual US / Canadian citizens residing in Canadian this is a non-sense. An dual US / Canadian citizen resident in Canada cannot walk into the US embassy in Canada requesting help. It’s against international law. So there you have, if you’re a Canadian citizen the US cannot offer you assistance in Canada even if it wanted to. The US is not offering any protection in Canada whatsoever, it’s against international law.
Click on – http://www.findlaw.co.uk/law/immigration_emigration/citizenship/23821.html
Here’s the paragraph from the website –
Under international law, UK Border Agency cannot give you diplomatic help if you are in a country of which you are a national. For example, if you hold both British and Chinese nationality they would be unable to give you diplomatic help when you are visiting China.
It does make sense. Another reason why the resident Canadian citizens need to be ‘carved out’ of FATCA.
What did Bill Clinton say when asked about why he “did his thing” with Monica Lewinsky? Did he not reply that he did it because he could? He was in the most powerful office in the world and had power over Ms Lewinsky and thus could use her as he chose. I suppose that this parallels what is happening with the FATCA and other extra territorial laws emanating from the USA; President Obama and Congressman Carl Lenin et al are setting out to “do their thing” to the rest of the world against the will, sovereignty and charters of rights of the world’s nations…. because they can. Is this not the definition of rape? Even to the question of penetration into the affairs of every other country.
Why are the Governments and Media of the world so quiet, so secretive about the FATCA fiasco. Is this all some Fabian plot? Why does the world not simply band together and say NO ! The US alone cannot stand. The US is utterly dependent on imports of every possible thing from the rest of the world, including capital investment and loans. The world could exist without the USA but the USA could not exist without the world.
@nervousinvestor
I think that the other nations of the world are trying to use diplomacy, in a situation where the US has thrown diplomacy out the door.
@bubblebustin
You are probably right. It seems like bringing a billy club to a tank battle however.
It still amazes me to this day that a bill that treats every nation in the world as though it’s a tax haven, and every US person in the world as a potential tax evader was ever allowed to leave the gate.
From an article about the Affordable Care Act’s current state of disrepair:
“The biggest threat to Obamacare is not Republicans. The biggest threat is Murphy’s Law, along with its corollary, the Law of Unintended Consequences. These are the most powerful laws in the world. They are even more powerful than the Affordable Care Act, and they are the nemesis of all master plans. Evidently, the President and his merry band of wonks had never heard of them.”
The ACA and FATCA have plenty in common is seems. This administration is in serious need of a reset button.
http://www.theglobeandmail.com/globe-debate/obamacare-where-the-liberal-dream-crashes-and-burns/article15798546/
It amazes me to no end, that with the already obvious abuse of power by America, that other countries in the world will just hand over MORE power to America as if it was a good thing to do.
@bubblebustin
Don’t forget to add TPP (Trans-Pacific Partnership) to your list of Made In America train-wreck acronyms:
The “Trans-Pacific Partnership”: Obama’s Secret Trade Agreement Will Push the Deindustrialization of America into Overdrive
The one thing that all of these projects have in common is that they have ALL been negotiated in absolute secrecy at the very highest levels of government and corporate power. Transparency? Meh, that’s so old-school.
Too bad their architects have no idea how their pet projects will soon coalesce into a perfect storm of global economic ruin. Too bad that today’s Captains of Industry won’t have any buyers left to purchase their shitty products because no one will have any money left to buy them. Just what happens when the Kingdom has finally wrung-out every bit of tribute from the peasants and there is simply nothing left to confiscate?
“Fascism should more appropriately be called Corporatism because it is a merger of state and corporate power”
― Benito Mussolini
As Blaze has just pointed out on the Maple Sandbox, Allison Christians has a new post on her blog entitled FATCA Q&A–A Work in Progress. This should also be required reading, especially for our secret IGA negotiators in Ottawa. She welcomes comments and/or e-mails but I don’t have the “profile” to do a comment and I don’t have her e-mail address. Would someone be able to pass this along to her from me?
RE: http://taxpol.blogspot.ca/2013/12/fatca-q-work-in-progress.html
Thank you Allison. I have a question for you. Will you be sending this along to Minister Flaherty and others? If not, could someone else send it to them with full accreditation to you? Minister Flaherty and the Dept. of Finance have been bombarded with questions about FATCA since MP Ted Hsu and MP Scott Brison submitted their long lists of questions to parliament. There have not been any answers to those questions yet. We need answers desperately and soon. Your excellent synopsis of FATCA actually includes some answers which I believe would be of value to those who are secretly negotiating an IGA with the USA.
I was chatting with 2 people from the UK this morning Via Ham radio and they told me hatred for the USA is at an all time high over there. I told them that we are seeing low opinions of them on the rise here as well as US people renouncing as soon as possible. It appears the world is talking about the US and it is not good. What did they expect?
@Em
Done! I passed it on. Very good Q&A…
@Deckard1138
Thanks for posting that TPP link here. I put it up on the FATCA question thread in response to Mark Twain’s posted videos, and it is an excellent primer for those just hearing about TPP…
Like FATCA, is another one of those “worst” things most Americans and Canadians have heard nothing about!
FATCA like TPP is an anti-sovereignty agreement that operates best by stealth… and there are good reasons that both left and right should oppose them…
I see the Left is calling for Nancy Pelosi to stop fast track authorization of TPP. Now, if we could just get them to call on her to support Demsabroad in Chile’s call for modification of FATCA and support residency based taxation, and we would be making progress….
@Em…
Allison says… “I don’t have a line to anyone in the PMO but anyone who wants to pass along a link to the blog to anyone they want is certainly welcome to do that, of course; I also have no problem with an attributed copy/paste in an email or whatever. Incidentally my email is accessible on my mcgill bio page at http://www.mcgill.ca/law/about/profs/christians-allison“
Thanks Just Me. I thought it was too good not to share it with Flaherty’s office at least. I think I’ll just send the link, that way it’s automatically attributed. It will be a nice follow-up to the 123 questions I sent not too long ago.
@Deckard1138, Just Me
TPP: Wikileaks has released another bombshell