A Brocker from Switzerland sent me this – the Ambassador there sent a letter in September to the Swiss banks concerning the ongoing problem of closed accounts.
The original (German) from Handelszeitung is here
Perhaps one of our German-speaking Brockers could translate/paraphrase from the comments section.
An explanation (English) regarding the Ambassador’s acts & the situation is here
Excerpts:
The top U.S. representative in Switzerland deplored the fact that Swiss banks closed the accounts of U.S. citizens and turned away new clients. LeVine wrote that she had received numerous letters from fellow Americans complaining that they didn’t have access to basic banking services in Switzerland.
…..Unfortunate Timing
The letter was sent to numerous banks, for instance Migros Bank and at least to one bank that still awaits a fine in connection with the tax dispute in the U.S., according to the «Handelszeitung» report. The timing of the letter thus appears a little unfortunate and will have caused some irritation.
A string of Swiss banks this year still were occupied with closing the tax dispute with the U.S., with fines the normal outcome of the U.S. investigations. The institutes not just had to plead guilty to violating U.S. laws in conjunction with their business with U.S. clients, but also had to promise to remain on a righteous path in the future – at least in respect to the U.S.
…The criticism leveled at Swiss bank by LeVine isn’t just tough to take because of the timing, but also because of what it implies. Some banks were ruthless in closing the dossiers of U.S. citizens, no doubt. But today’s reluctance to have any dealings with U.S. clients has more to do with hard business facts.
Banking for the Rich
Banking in compliance with U.S. regulation is so expensive that business with the normal, moderately wealthy expat doesn’t pay off. And given the unpredictable behavior of the U.S. authorities in tax issues, the risks and costs far outweigh the potential benefit of offering services to the 20,000 U.S. expats.
Swiss banks of course still do business with U.S. clients. About 40 companies have specifically licensed unit for that purpose. But of course: those services are restricted to the very rich, making it worthwhile. Several asset managers are also working on their onshore services in the U.S.
Swiss banking is still interested in U.S. customers. But not exactly in the way U.S. Ambassador LeVine had hoped for.
The letter is here: Letter from Susie
Could this be an attempt to get some overseas ballots from CH (up to 20k) in favour of Hillary rather than Donald, Gary & Jill?
@BB
UBS and Credit Swiss already offered basic accounts to US persons but with much higher charges and reduced services and all US persons are corralled and checked at headquarters with no mortgage or investment accounts allowed. Vontabel is not a retail bank it is an investment bank, and you need over 1,000,000.
She has achieved nothing, this is all PR….america cares.
CNN article about the same letter: http://money.cnn.com/2016/10/20/investing/swiss-banks-americans-fatca-switzerland/index.html
Thanks for the reality check, Heidi.
Little-known fact: the US Foreign Service has its own bank, which non-FSO’s (usually relatives) can also use, if given permission.
“Here is the Bloomberg article on the Levine Letter:
https://www.bloomberg.com/news/articles/2016-10-19/u-s-ambassador-tells-swiss-banks-to-open-doors-to-americans”
The Bloomberg article provides a good introduction to the problem but then proceeds to this bullshit:
‘Thousands of Americans living abroad have given up their passports in favor of other nationalities in protest of the U.S. stance on citizenship-based taxation.’
It’s not done in protest. It’s done under coercion, with regret that it has become necessary. The Bloomberg reporter and editor need to read the IRS Taxpayer Advocate’s report to Congress dated 2011-12-31 where the IRS told Congress that renunciations became necessary due to honest taxpayers’ inability to comply with poorly designed US tax laws.
“Little-known fact: the US Foreign Service has its own bank, which non-FSO’s (usually relatives) can also use, if given permission.”
Suppose I were a relative of a US FSO. The FSO’s bank would operate my account in yen, allowing my employer to pay my salary without charging a fee, allowing my landlord to deduct rent with the standard Japanese domestic fee for initiating a wire transfer, and allowing me to withdraw cash for living expenses without charging a fee, right?
@Zla’od – “Little-known fact: the US Foreign Service has its own bank, which non-FSO’s (usually relatives) can also use, if given permission.”
Isn’t that the same bank (actually a credit union I believe) that provides the US account that American Citizens Abroad (and quite a few other membership organisations) offers to its members?
That sounds like the State Department Federal Credit Union (www.sdfcu.org). It’s open to civilians off the street, if they join some Iobby group. but I thought the embassies had something else. I can check..
@Zla’od – no need to bother on my account. I won’t be applying to join. 🙂
About the State Department Federal Credit Union account (this is an ACA project): https://www.americansabroad.org/sdfcu-account/
ACA just kowtows to the homeland. This credit union account is a joke, just giving the USA more extraterritorial control over the money we have earned and saved in our countries of residence. Hands off my British earnings!!! I want nothing to do with this homeland claptrap from pathetic homeland shills purporting to be speaking for citizens abroad.
@Jenny, in terms of US extraterritorial control over banking and corralling the assets of those abroad inside the US:
“………”The U.S. has always been the number one tax haven in the world,” said Kenneth Rubinstein of
Rubinstein & Rubinstein. “If you look at U.S. policy, it’s always been to discourage capital flow
out and encourage flow in. That’s the underlying motivation for” the U.S. Foreign Account Tax
Compliance Act.”……..”….
……”There is broad agreement that the United States was successful with FATCA because
Washington brandished a big stick in the form of the 30 percent withholding requirement. “Just
about every foreign bank holds its excess cash in U.S. foreign notes,” Rubinstein said. “The
threat is a very serious one. That’s why every institution has agreed. Foreign governments don’t
have the same leverage over us.”
Boitelle agreed. The situation “may be different if the European Union made trade or financial
services agreements dependent on reciprocity and if exchange of information agreements did
the same,” he said. “But with FATCA already in place, the position of other countries is not very
strong. The U.S. will get the information it wants in any case.”
Daniel Blum of the University of Vienna said the EU could have similar leverage if it wanted to.
“In theory, it could speak in one voice,” he said. “But there are deviating national interests.””……….
http://www.anaford.ch/wp-content/uploads/2016/01/taxnotes.com_-_new_reporting_rule_might_deflect_some_criticism_of_u.s._as_tax_haven_-_2016-01-23.pdf
Thanks @badger. I agree with those views. FATCA is a breathtaking gauntlet inciting financial warfare with the entire world. I still cannot believe that the government of the country I grew up in and loved could be so monumentally arrogant, hypocritical and downright nasty as to pass this ‘law’ and incite not only discrimination against its own citizens abroad but also legislative reprisals on a global scale.
@not that Tara
“Could this be an attempt to get some overseas ballots from CH (up to 20k) in favour of Hillary rather than Donald, Gary & Jill?”
If so, she will deceive you by not allowing any affected people to have an ounce of relief from this madness. And Fatca will unfortunately carry on for another term.
At least with Trump there is a glimmer of hope for change.
@Jenny
Yep, so sad.
@heidi
I agree with your “this is PR” comment. UBS and Credit Suisse continued without interruption to offer banking services to US citizens (US Persons) in Switzerland and placed them into so-called “US Desk” units. PostFinance reportedly was pressured to continue servicing US citizens in Switzerland as a result of pressure from the Swiss-American Chamber of Commerce head and former US Ambassador Beyer on the Swiss government, which owns it, in 2012/2013. That could have gone differently.
Migros Bank, a large retail bank with over 200 offices, is also offering banking services to Americans in Switzerland, according to a quote in this week’s Handelszeitung. I do not know if Migros discontinued service and then re-started it or whether the service has been continual.
Corner Bank is possibly an addition to this short list of retail banks offering services to Americans. It is known mostly as a credit card bank and has five offices in the country: Lugano, Chiasso, Locarno, Geneva and Zurich. According to rumor, Bank of America may own 12% of Corner Bank, but I have been unable to verify this.
It has been reported that UBS and Credit Suisse offer mortgages to Americans in Switzerland and PostFinance does not because the two banks whose mortgages it markets refuse to. It is unknown whether Migros Bank and Corner Bank offer mortgages to Americans in the country.
Handelszeitung wrote that a number of asset management banks in Switzerland are offering investment services to Americans for amounts starting at around $1 million. Normal mortal Americans in the country can use a savings account paying about 0.10% or renounce their US citizenship. US Ambassador LeVine is mostly a bag of hot air.
@Innocente
All services at increased costs?
Suzi is trying. Give her some credit. Read page 3 of her letter to y’all here:
http://photos.state.gov/libraries/switzerland/890/public/CLN%20Package%20-%20V2_001.pdf
IBS Admins: worth highlighting, maybe?
NTTara
Suzie must be totally naive if she thinks the Swiss banks will politely roll over and play the USA’s game after they have been fined and threatened for doing exactly what the US is doing in Delaware etc. They are angry , just as the US diaspora is angry.
This is either ignorance on her part, or the usual US arrogance.
I and others have already been told that we are ‘unfortunately’ co- lateral damage by the last US Ambassador back in 2012. The only action now needs to come from Washington . Suzie’s PR is too little, too late for those American’s left in Switz.
Although the number of US citizens in Switzerland is declining, the US Embassy in Switzerland continues to maintain three ACS sites at the Bern embassy, Geneva consulate and Zurich consular agency. For those who don’t live here, Zurich is only 60 minutes from Bern and Geneva 1 3/4 hours from Bern by train, with connections at least every 30 minutes.
If all Americans with permanent, temporary and diplomatic/ functionary status are counted, around 20,000 US citizens are resident in Switzerland. By comparison, the German state of Bavaria has 89,000 Americans resident there, is nearly twice the geographical size as Switzerland and services Americans from one ACS site, the US consulate in Munich.
A possible reason that the US maintains three consular sites (plus a fourth separate US mission in Geneva) is to gather electronic data and host CIA and other so-called intelligence agencies. This article in a Swiss newspaper confirms the data gathering functions of the US embassy at two locations and the US mission:
http://www.schweizamsonntag.ch/ressort/politik/us-geheimdienst_abhoeranlage_in_zuerich/
With the declining American population in the country, the Swiss government is in a position to apply pressure to the US government to downsize its physical locations. It could start with the US consular agency in Zurich and the US consulate in Geneva. Furthermore, given the relatively small number of Americans here, the existence of a US embassy in Switzerland should also be called in question. The embassy could be downgraded to a consulate, reporting to the US Embassy in Germany or another country, or it could be entirely eliminated. Americans in Switzerland could be serviced from Frankfurt, Munich, Paris or Milan, as they are now for US social security matters.
@innocente
D’accord
So the ambassador is pretty much saying to Swiss banks, “Please let Americans open accounts. Pretty please, with sugar on top?” A departure from the forceful extension of U.S. jurisdiction FATCA represents.
Anyway, I live stateside and am a U.S. citizen, but have always dreamed of moving abroad. Unfortunately, my current disability does not permit me to do that. I was generally a liberal, siding with the Democrats, but when I found out about what we’re doing to our expats and “accidental Americans” I was horrified. I was involved with the 2016 election, in opposition to Trump, but since reading about this I’ve begun to feel alienated from U.S. politics, and the “debates” happening in America today, about “he said this he’s a bad person”, “so she did the same thing he did but you hypocrites won’t call her out on it”, etc., and it now just seems so mechanical, so ridiculous. Meanwhile, our citizens living abroad are suffering, and our country is falling behind on many measures.
There are ways to remove this burden for Americans who have permanently settled abroad while going after tax evading “fat cats”, which are detailed in the paper “Citizenship Taxation” by Ruth Mason, Professor of Law at University of Virginia School of Law, which was published in 2016 in Southern California Law Review and which is available online open access. Some ways are, Require the citizen establish tax residency in another country before being released from paying US taxes, Tax citizens only for the first three years they live abroad, and other ways.
These would be much better, but the stubbornness in doing so, and doubling down on this law by hurting expats and accidental Americans and imposing our jurisdiction on the world gives me a bad taste in my mouth. It’s disgusting that it’s the Democrats who have been pushing it. Other developed countries are able to establish universal health care, good social safety nets, and provide for an education without putting their citizens deep in debt, all without fleecing their citizens who have permanently settled abroad.
It’s hard, even for this citizen living stateside, to really feel a part of a country that does this, and so I am burnt out on our politics. If expats cause Democrats to fail to take either house of Congress and so give us a divided government, then I say we would deserve it. As for me, I am now definitely wanting to move abroad and maybe ditch my citizenship for good, but that’s years away.
Good blog, by the way!
Thanks, beneficii, for your comment here which shows is based on your not being distracted by all the static and therefore asleep to the important issues as so many in your (and, for some of us, our former) country and ours, the ones we’ve chosen to become permanent residents or citizens of. It is encouraging when someone from within the US borders has understood this issue.
You’re right — this is a good blog and, as important, a support for each other of those going through this absurdity. Be well!
Ambassador Suzan G. LeVine
U.S. Embassy Bern Sulgeneckstrasse 19
CH-3007 Bern, Switzerland
Ambassador LeVine:
I have recently seen a scanned copy of a letter from you, dated September 28, 2016, addressed to an unknown party (the scanned copy has more parts blacked out than a document obtained under FOIA), about the inability of “U.S. Persons” to obtain banking services in Switzerland. The letter begins,
One of my foremost priorities is to respond to the concerns of U.S. persons residing here in Switzerland.\
I find this a bit difficult to believe. I would have thought that an American ambassador had some obligation to support US policy, which is to attack U.S. persons abroad, not respond to their concerns.
If you really want to respond to the concerns of that most unfortunate creature known as the U.S. person abroad, there are a few things you can do. First, instead of complaining to Swiss Banks, the victims of American bullying, you can complain to the hypernationalistic blowhards in Washington who are doing the bullying, intimidating banks around the world into dropping American clients.
Second, perhaps you recall how your country reacted in 1812 when the United Kingdom imposed its law extraterritorially, impressing American citizens who used to be British into their navy. The US did not sign an inter-governmental agreement promising to help the UK remove their former citizens from American ships; it declared war on the UK. You could write to the Swiss government, urging them to respond to extraterritorial aggression by your country the same way—by declaring war on the US, something Switzerland and every other country in the world has thus far been too craven and cowardly to do.
As for those most unfortunate US persons, the only advice I can give them is to do whatever it takes to stop being U.S. persons. Get rid of their US passports or green cards, quick time. For the citizens, this involves a long, difficult, and expensive process the US would surely condemn as a serious human rights violation had it belonged to any other country. However, once completed, these former citizens of “the land of the free” can experience the same modern banking services that any Chinese, Cuban, Iranian, or North Korean citizens living in Switzerland already take for granted. They will enjoy not only the conveniences of 21st century life, such as holding banking or investment accounts, but also the pleasant sensation of wiping their arses with the US flag every time they open one.
As for you, perhaps you would like to consider resigning from your ambassadorship, and finding some capacity where you can work for freedom instead of against it. Freedom and human rights are under threat around the world as they have not been for a long time, and you’re on the wrong side of that battle. Time to change.
RMS