It’s summer, and Americans with wanderlust will find their dollars very welcome as they spend them at the London 2012 Olympics and in other distant lands. Those trying to open an overseas bank account will get a much chillier reception.
Increasingly, non-U.S. financial institutions, including those in Switzerland, Germany, and the United Kingdom, don’t want custody or management of assets owned by either American citizens or residents. If you had a foreign bank account in the past, you may have already received a letter asking you to leave within a few months or even weeks.
What has made U.S. investors so unpopular with most non-U.S. financial institutions? It started in the early 2000s with modest success and picked up in 2008 during the UBS investigation when the fiscally challenged government began looking for chances to increase tax revenue. The prime targets were U.S. taxpayers with undeclared assets overseas. Various agencies, especially the Internal Revenue Service and the Department of Justice, set out to find and prosecute these non-compliant individuals.
This resulted in several so-called voluntary disclosure programs–updated versions of rules in existence since the first half of the 20th century. The latest (and third) one seems to have an indefinite life span. The previous two programs generated 33,000 disclosures and $ 4.4 billion in revenues since early 2009.
Banks that in past decades catered to clients who wanted to keep assets offshore, came under close scrutiny. UBS was the first major case in 2008 to 2009; Bank Wegelin was another. Today there are supposedly at least 11, some even say 40, Swiss banks on a target list of the Department of Justice for full review and potential indictment….
It is understandable for the US government to take action against money laundering, but the little innocent people cannot be harmed as a result of such. US policy is making it difficult for American citizens to refinance their mortgages simply because they are “US Persons”, and such discrimination is a federal crime in the United States. One would think that America would be more interested in protecting its citizens instead of harming them with flawed policy, but such doesn’t appear to be the case.