On October 13, 2014 Robert Wood published a fascinating post title: “100 Swiss Banks Get Ultimatum: Hand Over Americans Or Face U.S. Prosecution“. Mr. Wood is writing about the Swiss Banks who foolishly entered the “OVDP For Swiss Banks Program” that the Department of Justice announced in August of 2013. I have followed this topic with great interest: arguing that Swiss Banks should NOT have joined OVDP for Swiss Banks and that Americans in Switzerland should NOT join OVDP and take part in the FBAR Fundraiser.
Mr. Wood’s post demonstrates the pitfalls of entering into disclosure agreements with the U.S. Government. In this case (among other things) the U.S. is demanding that “Americans be handed over”. The reality is (as one commenter notes) that what the U.S. Government calls “Americans” the Swiss Government likely calls “Citizens of Switzerland”. Therefore, the U.S. is using the “OVDP for Swiss Banks Program” as a vehicle to force Switzerland to turn their own citizens over to the United States. Interesting. That said, every country that enters into a FATCA IGA (which is really an OVDP program for countries) has agreed to turn its own citizens over to the United States. For example, the “Alliance For The Defence of Canadian Sovereignty“, in it’s video of the FATCA proceedings in the Canadian House of Commons, describes July 1, 2014 as the day that “Canada begins to turn its citizens over to the United States”.
Robert Wood describes the demand to the Swiss Banks in the following way:
Now, from its position of dominance, the Justice Department has made it clear what it wants from the hundred Swiss banks that hurriedly grabbed the DOJ’s settlement deal before January 1, 2014. The U.S. seeks ‘total cooperation’, and that truly means total. Any American names, details, and more. The Justice Department intends to get it all. … (and later)
However, all banks must report to U.S. authorities any information or knowledge of activity relating to U.S. tax. They must reveal all cross-border activities and close the accounts of Americans evading taxes. The 3 tiers of penalties are vastly better than a full-blown U.S. investigation with potential tax evasion charges. Participating banks are required to provide details on American accounts.
In the same way that Americans abroad regret having entered the OVDI/OVDP programs I think the Swiss banks who entered OVDP for Swiss Banks now regret it.
How did we come to this? The answer is that some U.S. Homelanders used a limited number of Swiss banks to evade U.S. taxes. In other words, it was a small number of people who brought us to the point where Americans abroad are being forced to renounce their U.S. citizenship to survive.
But, all of that is old news. For Americans abroad their problems are NOT the state of their tax compliance. Their problem is that they are American.
Mr. Wood ends with some very interesting NEW news. He writes:
Meanwhile, the tax evasion trial of a key Swiss banker and former UBS high-flying executive, Raoul Weil, is commencing in Florida. It comes after a five year wait. Aptly, if he is convicted of helping Americans evade taxes, he could spend five years in jail. After all, if the last five years of IRS and DOJ success has shown anything, it is that the U.S. is all powerful and wants to make examples of high-flying individuals and institutions.
I had completely forgotten about Raoul Weil. Apparently his trial begins today October 14, 2014 in Florida. It will be very newsworthy.
Ex-UBS Banker Weil Says Trial Witnesses Fear Retribution http://t.co/H2O8EOrWAl via @BloombergNews
— U.S. Citizen Abroad (@USCitizenAbroad) October 13, 2014
What this Swiss banker could reveal at his trial http://t.co/8JSkaDedlE
— U.S. Citizen Abroad (@USCitizenAbroad) October 13, 2014
It will be fascinating. There are two stories being developed:
Story 1 – The Defendant Is Alleged To Have Helped U.S. Citizens Evade U.S. Taxes
Story 2 – How Raoul Weil Finds Himself Standing Trial In The United States To Begin With
Each story has its own narrative. Each story is important. I came across the following post at International Man about the second story.
@USCitizenAbroad What the world looks like when non-violent political offenses (like Weil's) become extraditable. http://t.co/mNU8Uh4m8M
— International Man (@intlmandotcom) October 14, 2014
The article referenced in the above tweet is thought provoking. It begins with:
Though it seems farfetched, the prospect of being extradited to North Korea is a chilling thought.
Consider the thought experiment below and see if a similar scenario is as implausible as it initially sounds.
Suppose you are on vacation with your family in China, doing typical tourist things: checking out the Forbidden City, Tiananmen Square, and the Great Wall. However, about five years ago you had made a couple of viral YouTube videos poking fun and making jokes about the North Koreans—particularly their deceased Dear Leader Kim Jong-il. The North Koreans, however, were not amused at all. And despite years passing, they have not forgotten nor forgiven. Insulting the North Korean government and especially the Dear Leader is deemed a very serious “crime.”
The North Korean authorities have charged you with a crime and declared you a fugitive from justice—facing many years in prison. They also put out an international arrest warrant.
When they found out you had checked into a hotel in China—a country which they have good relations with—they sprang into action. An official request was made to extradite you from China to face trial in North Korea.
The Chinese, treaty-bound and respecting the wishes of their ally, oblige.
Then, at 2 in the morning, you’re violently awakened as a squad of heavily armed Chinese police break into your hotel room, point loaded guns at you and your family, and haul you away in your pajamas. After some brief formalities in a Chinese kangaroo court, you’re taken to a jet bound for Pyongyang, where you are promptly convicted by another kangaroo court and thrown into a North Korean prison. The end.
This made-up story is what the world could look like if the international norm of not extraditing people for political “crimes” continues to be eroded.
You will find the complete article (which I highly recommend) here.
Follow the link here to Professor Allison Christians brilliant commentary “Paperwork and Punishment: It’s Time to Fix FBAR”.
http://rothcpa.com/2014/10/tax-roundup-101414-iowa-tax-credits-expected-to-pay-out-361-million-this-year-and-fix-fbar/
Just checked the US programme for Swiss banks:
“U.S. Related Accounts” means accounts which exceeded $50,000 in value at
any time during the Applicable Period, as measured by the account balance on
the last day of each month during the Applicable Period, and as to which indicia
exist that a U.S. Person or Entity has or had a financial or beneficial interest in,
ownership of, or signature authority (whether direct or indirect) or other
authority (including authority to withdraw funds; to make investment decisions;
to receive account statements, trade confirmations, or other account
information; or to receive advice or solicitations) over the account , as
determined by applying the due diligence procedures applicable to “Lower
Value Accounts” in the FATCA Agreement, Annex I, Part II, for accounts with
$250,000 or less in value at all times during the Applicable Period, and by
applying the due diligence procedures applicable to “High-Value Accounts” in
the FATCA Agreement, Annex I, Part II, for accounts with more than $250,000
in value at any time during the Applicable Period, notwithstanding the amounts
and dates set out in the FATCA Agreement, Annex I, Part II.
So if I am reading this right, if your broker, fund manager or account responsible at a bank has US citizenship or a greencard, yours is a US related account and gets reported and enters into the bank’s penalty calculation?
Sounds like this will really end foreign bank accounts for americans. If a banker even faces jail in Usa they will certainly throw all US persons out before risking it.
… and then some try this:
http://www.tagesanzeiger.ch/schweiz/standard/An-Schulfragen-gescheitert/story/21331686
In the event that anyone is unaware of this, please note that each contributor is asked to post under one alias only. When we see that someone is using more than one identity, we normally email and ask that only one be chosen, otherwise, we will not be able to post the comments. In some cases, email addresses are obviously not valid. (We also commonly have emails returned and have no way to contact the writer). In this event, comments will be placed in pending until such time that the person contacts one of the admins here indicating which alias he/she wishes to use.
Tricia
nobledreamer16@gmail.com
give US the right to post with anonymity, please?
… or at least put this website under SSL!
@Tricia – I support putting IBS under SSL. While the blog is public, the data being sent to the blog should be encrypted. Today, even Linkedin is SSL connected.
Too many rules can cause contributors to shy away. Food for thought anyway.
@ X
I don’t think it is too much to ask posters to stick to one nom de plume (something other than Anonymous), even though I changed mine slightly when I got a new e-mail address (the Bee is for Brock). As for SSL, I asked my husband about that and he said posters would hardly even notice any difference except http would become https.
Guys,
The comments editors have no control over SSL and all of that. We don’t generally know who people are. And we are not the least bit interested in knowing. I don’t see that anyone’s “anonymity” has been compromised here. Only the people doing this will know who the comments are directed toward.If legitimate email addresses were being used, we would contact them privately.
The difference EmBee, is that you identified what you had done. When people post under as many as 14 different names, that is quite a different thing.
We have people who have used multiple identities over time even going so far as to support “each other” in lines of thought, talking to each other, telling other Brockers they should listen to the “other one” and so on. This is misleading, dishonest and has nothing to do with interfering with anyone’s “right to post with anonymity.” I would imagine a lot of Brockers would not appreciate being deceived and that they would expect us to do something about it. Some people have suggested such users should be banned. We prefer a simpler solution which is just to ask everyone to use one alias. I am not aware of any other “rules” we are asking anyone to abide by.
It’s loathsome to think that someone would use aliases to gang up on someone or to fake some kind of consensus on an opinion or point of view. That’s where there should definitely be some censorship, IMO!
@ Tricia
Now you’ve got me trying to recall one of those multiple-alias conversations. However, I’ve read so many comments it’s not likely I ever will. I think Brock is working quite well and to be honest I didn’t even know what SSL means until I asked. I knew I’d have to give up a little anonymity when I entered the Brock portal back in 2012 but I sensed I would get something in return. It turned out I got more than something, I got a whole lot!
@Embee
I don’t think there is anyway you could possibly know of one of those conversations. We do not discuss that outside of the editors/committee.
Apparently, SSL would not affect what we see anyways.
May I ask, in what way did entering Brock compromise your identity? When I first came, of course a few of us knew each other from ExpatForum and that has expanded but we chose to do that by connecting off line.
I am glad you feel this way about Brock. That was the whole point of what we were trying to do!
@ Tricia
NO, Brock did not compromise my identity. I didn’t mean that. For me it was a big deal just to give someone other than a relative or friend my e-mail address. Now it’s in dozens of places because I also found myself compelled to comment on articles about US taxation. Cripes, I don’t even use a credit card because I like the more anonymous nature of using cash (until they chip it or ban it). Guess you can extrapolate that to determine how I feel about FBARs.
@Embee and @Tricia, I still have no idea how it happened but someone somehow pretended to be me (in May 2013) and even used my full name as an alias, both here and at Jack Townsend’s site. The person on here gave outcry full street address and said they were a tax evade or something ridiculous; I emailed Pacifica who promptly removed it but I still have no idea how my name and full address were discovered.
The imposter on Jack’s site also mentioned a quiet disclosure; what was also so terrifying was how some people over there promptly made some sly remarks along the lines of ‘oh (first name listed) I see you’ve now made it over to Jack’s blog and hope your FBAR disclosure went OK ‘ or similar. I decided just to ignore it instead of react.
It makes me wonder if these sites where we post aren’t in fact being watched by the DOJ, IRS, or even the NSA. It makes me worry that anyone who is consistently outspokenly critical of the US government could be targeted, whether by being audited or perhaps being harrassed at the border when trying to visit. I’ve even wondered about possible whistle blowers.
There’s also of course the remote but still very real risk that the Reed Amendment could start being enforced against anyone believed to have renounced for tax reasons. And in the current climate, enforcing it could be used as a means to deter the surge in renunciations.
An alternative to begging Brockers to be good kiddies and stick to one moniker is simply to out the scammers who pile up 14 or whatever identities so they can try to swarm a fake consensus. Why protect that? Part of being a nice Canadian?
Anyway, that piling-on thing should only infect lovers of silent majorities and groupthink. The US person refugees who tend to populate the Brock island have had their shock inoculation before ever landing on shore.
Oops had a comment and lost it.
@ monalisa
I remember that incident. It was very disturbing. Someone used my name once but not in such a terrible way as with you. Yes, I’m sure there are watchers at Brock but one can only hope that they are incidentally learning something valuable about their own government and the insane tax system the US has created. BTW did you see this from a recent interview with James Bopp?
@EmBee
**It is even considering proposing a way to restore citizenship to the thousands who have given it up because of FATCA**
Hopefully it won’t be like before…. just give it back… it should be… fill out this easy form for free… presto… u can have it back & refund the money spent to dump the citizenship also…. If not… everyone move on
Of COURSE this site is being monitored by the NSA etc.
US_Foreign_Person, I appreciate your embittered sentiment but some of us, including me, still have strong ties to the US. Though I feel embittered by all that’s happened, I would nevertheless be in a quandary if my citizenship were offered back to me, especially if major tax reform takes place.
It occurs to me that if something happened to my significantly older husband that I would be completely on my own here in the UK. We had no children….if none of this fiasco had happened, the natural thing would have been to seriously consider returning to America to be taken care of (or at least be in the vicinity) of my niece.
And though it’s a remote risk, I still fear that I could in future face difficulties even visiting the US if the USG want to be c*nts. This Reed Act could in theory be used against anyone who renounced who’d previously suffered significant double taxation
So I renounced a while ago, and this week I had a meeting with my bank. The agent said their system had detected me as a US person (I was born in the US). I told her that I had a CLN, which I promptly gave her. I got back a paper to sign, which basically said, “I authorize the bank to give any information about my accounts to anyone they deem necessary to comply with FATCA or any other regulation.” I refused to sign. I also got a W8BEN to fill out, which I also refused to do. I offered to close my account (not something the bank wants me to do). I am waiting back.
@monalisa1776
I see nothing wrong if u want the citizenship back or keep it… but it should be your choice… its shouldn’t be just given back without your permission if u went to all that trouble to unloaded it… I hold one citizenship… canadian but my family made a huge mistake by becoming a gc holder… my family is a mix of US citizens through marriage & children now… so to dig us out of this mess… it can cost us quite a bit… seems when we got the GC… they didn’t tell us that we became US property forever unless we exit like a citizen… we are voiceless in the US… & our own gov’t tossed us under the bus… so this lawsuit is the only solution so please… everyone donate… this will effect our future generations if this is not stopped… something we thought was great has turned out to be a life changing event where we can end up poorer then we started
@Dax, the w8-ben actually certifies to the bank and IRS that you are NOT a US person for tax purposes. In a way, I’d actually be relieved to be asked to fill out that form because I also worry that my building society or pension plan might report me to HMRC who, in turn, might relay info to the IRS.
Obviously, as I have expatriated and correctly filed 8854, etc. I should be fully logged out of the US system, but am concerned that there could be mix-ups with the IRS still receiving information via FATCA and getting confused, wondering why said people haven’t been reporting/filing, etc.
@US-Foreign_Person, I agree that any potential restoration should be by invite/request only rather than automatic.