Switzerland’s largest political party, SVP, voted against FATCA. The no vote was then followed by the Greens. Together with the Social Democrats (SP), the three parties make up the political majority. The SP, wanting reciprocity through model I, is selling its vote at a high cost, pushing the federal council to make compromises which lead to reciprocity.
Die SP treibt wieder das alte Spielchen
…Die SP versucht, ihre Zustimmung möglichst teuer zu verkaufen, in diesem Fall möglichst viele Zugeständnisse zu erreichen und den Bundesrat auf eine Linie zu zwingen, die zu einem automatischen Informationsaustausch führt. Dies kann sie tun, weil die SVP und die Grünen das Fatca-Abkommen kategorisch ablehnen. Denn die Fraktionen von SVP, SP und den Grünen kommen im Nationalrat zusammen auf 117 Stimmen, was eine komfortable Mehrheit ist…
The Social Democrats had this stance with Rubik (the UK and Austrian agreements) as well. They are real idealists, believing that the world is full of bright, beautiful and honest people and that Perfect Federal States oversee them all in the utmost benevolence.
Very interesting! Has this been reported yet in English-language media?
You write, “The SP, wanting reciprocity through model 2.” — I trust you mean Model 1, which is the supposedly “reciprocal” version. Model 2 “nonreciprocal” is what they have. Is it clear why they want the “reciprocal” version? CH wouldn’t derive much usable tax information from reciprocity, even if they could get reciprocity, which they can’t: http://www.repealfatca.com/index.asp?idmenu=4&title=News&idsubmenu=112 Maybe it’s just a question of sovereignty and national honor: we won’t provide information to the Yanks unless it’s a two-way street? Or maybe it’s just a ploy to kill the IGA altogether.
In any case, if this blockage of the IGA stays, it’s a major blow to FATCA! Bravo! The spirit of William Tell lives on!
Sounds like it is the principle of the thing (something I can certainly get behind). I like this type of attack on FATCA because the ways it’s framed is going to resonate beautifully with the local citizens. Puts the governments on the defensive (“what do you mean that you gave away the store and didn’t ask the Americans for information in exchange? Where IS your patriotism?” and boy would I love to see some of these folks in the hot seat answering THAT question 🙂
@Jim Jatras, sorry for the mistake and thanks for pointing it out. I’ve made the correction to model I. This is the danger of doing quick translations of the latest during my lunch break. There probably won’t be an English version of this. It’s just an internal party conflict between the left and right. The right is accused of always saying “no”, and the left is accused of always twisting the “no” to their advantage.
What “vote” is the article refering to? Google translate seems to indicate that the actual parlementary vote will be in the summer.
@Just a Canadian, it’s just an party “vote” or position on the issue. It comes from the first paragraph:
Translation: After the “No” from SVP and the Greens to the FATCA agreement, the SP has been advanced into a key position
The SVP position is better explained in this article:
SVP-Widerstand gegen Steuerabkommen Fatca (SVP resistance against the tax agreement Fatca)
This article describes the “no” as an “Entwurf für die Vernehmlassungsantwort”, or a response resulting from a consultation.
So, the parliament will vote on it in the summer and if SP, Greens and SVP vote “no” with 117 votes, they will be a clear majority.
Thanks for the clarification. Would this kind of thing normally be a party line vote or would there be some defections from the party stance?
Swisspinoy beat me to it, but here’s a very rough translation from my translation package on the PC. I haven’t tidied it up at all, but I think the gist is clear enough.
“The FATCA agreement with the United States will make some waves in the Parliament. To the term Friday of the consultation procedure, the UDC and the Green oppose the application of the American fiscal law in Switzerland. The PS temporizes, PLR, PDC and PBD swallow the snake.
The agreement signed between Bern and Washington last February 14 must enter into force January 1st, 2014. It guarantees that the accounts detained by American taxpayers by Swiss banks will be declared to the IRS of the United States. The holder’s green light is however necessary.
Due to a lack of such a downstream, information will be exchanged all the same but on the basis of the administrative aid foreseen by the conventions of double taxation (grouped demands). The agreement doesn’t foresee a reciprocity on behalf of the United States. But it specifies that, if Switzerland cooperates to the application of FATCA, Washington is arranged to negotiate such a convention.
The minister of the finances Eveline Widmer-Schlumpf didn’t hide that Bern doesn’t have the choice. The Swiss financial place cannot pass besides the requirements of Washington, to the risk to lose foot on the American market and to fulfill a tax in the source of 30%.
Refusal of the UDC and the Green
The UDC estimates that the FATCA agreement doesn’t respect the sovereignty of Switzerland, to that it imposes the American right. For the Green, Switzerland needs a strategy of the valid clean money for all countries and not only for the United States.
For the PS, a one-sided and particular solution for the United States is not foreseeable. The PLR approves “in principle” the agreement. It wishes precise answers however in the message of the federal Council on the advantages of a ratification.
Is FATCA better
As the American market is fundamental for Switzerland, it owes all to put in work to get good conditions, recall the PDC. This party estimates that for Switzerland, is FATCA better that nothing at all.”
And here’s the article in French:
My sense is tremendous pressure is going to be applied to the Socialists to get this through however, it is still very much an open question especially if other countries do not go along.
Also, don’t forget that a popular referendum can be organized, and if it passes the so-called IGA would be thrown out, even if it passes the National Council (lower-house) and Council of State (upper-house) of the Swiss Federal Assembly.
If BRIC countries along with other key players like Canada and Germany continue to drag their feet on IGAs, a referendum in Switzerland will become very likely and we will be a seeing a return to the negotiation table for something a lot more equitable for Switzerland (a mandatory information exchange agreement). Under Swiss law, all residents must declare worldwide assets as they are used for calculation of Swiss wealth tax rates (although this reporting requirement is not really enforced at all unless you start moving large amounts of undeclared assets into the country).
Last time the Swiss Federal Council initiated a project to surrender Swiss sovereignty and independence (application for membership in the European Union in 1992), it was put to a referendum and defeated, forcing the government to come up with a more equitable relationship with the EU (so-called CH-EU bilateral accords that are in force today which gives the Swiss the benefits of EU membership without having to carry the baggage of EU membership).
Here’s a cute comment:
Our democracy is not being repressed by the banks, but rather our sovereignty by America; They wrote a 500 page strong law that is valid outside of its jurisdiction. Switzerland needs to urgently pass the “foreign chocolate producers compliance act” and assassinate anyone worldwide who doesn’t comply with it.
@Just a Canadian, there can be some defections, but if most Greens, SVP and SP vote against FATCA, then it will be thrown out. If the parliament doesn’t throw it out, then there is a very good chance (my analysis based upon the nature of most comments) that the people will throw it out with a popular referendum.
This is interesting:
With 68 likes and 8 dislikes so far, my comment did catch a little interest:
Here’s the translation:
Is it still the desire of the government that Swiss (dual) citizens are taxed in America even though they live in Switzerland and work for Swiss companies?
America would never allow for US (dual) citizens living in America who work for US companies to be taxed by Switzerland.
Why then must Switzerland do what America itself would never do?
@ swisspinoy, great way to illustrate that what the US demands (ex. from the Swiss) is something that it would never allow. Ditto for the bank reporting.
and interested in this statistic….. “….over 900 of whom have renounced their US citizenship in 2012 alone according to Ambassador Beyer] “..
I wonder how/whether we can get the renunciation stats from the US Ambassador to Canada, or Sweden, or……? Obviously Beyer wasn’t using only the questionable Roll of Shame numbers.
Hold on to your hats folks….the SVP and FDP are launching a bipartisan campaign to collect signatures for a FATCA referendum. A recent poll showed that 71% of Swiss want to keep their bank privacy laws intact so this should have no problem getting 100,000 signatures to be put on a ballot.
Their proposal would stop the automatic exchange flow with foreign tax offices. Information exchanges would be allowed if a foreign government subpoenaed information because of tax evasion or fraud. They would have to show reasonable proof of this. This proposal would also only protect people living in Switzerland. Swiss people overseas would not necessarily be protected nor would foreigners with swiss bank accounts. The way this proposal is formatted is really pragmatic and to my liking. Many Swiss like the banking privacy but are opposed to tax evasion. This caters to a very broad group of people.
The link to this as I forget it before
As soon as the initiative text is ready I’m taking it to everyone I know to sign.
If the initiative is successful it will be a good shot across the bow of US citizenship-based taxation.
@Joe Blow, I’d say that there is a high probability that the initiative will be successful. The press today:
Leading figures of FDP and CVP no longer trust the position of their political colleges and finance minister Widmer-Schlumpf on banking secrecy. Thus, they support the SVP initiative to write banking secrecy into the constitution.
The chairman of the SP stated:
We are dealing with an imperialistic act of the US which is demanding a one-sided information exchange.
So, the largest party, SVP and the Greens are against models I && II, the second largest party is against model II and the other two large parties, FDP and CVP, are losing leading figures who are favoring the SVP position.