Author Archives: swisspinoy

Sounds like a cool thing to do.  One can meet the most powerful man and woman in the world in person, free of charge!  This is a great benefit of being an American citizen, of paying US taxes, of contributing to a presidential campaign!

Meet the President in person and be a guest of the First Lady at the Democratic National Convention in Charlotte. Airfare and hotel included!
– BarackObama.com

Yet, there is a little catch, hidden away in the fine print.  If you are an American working overseas, go away.  This does not apply to you.  You are excluded, rejected, unwanted.  America is not for you!

PROMOTION OPEN ONLY TO INDIVIDUAL UNITED STATES CITIZENS AND LAWFUL PERMANENT U.S. RESIDENTS WHO ARE LEGAL RESIDENTS OF THE FIFTY (50) UNITED STATES, THE DISTRICT OF COLUMBIA AND PUERTO RICO, AND OVER THE AGE OF 18 (OR THE AGE OF MAJORITY UNDER APPLICABLE LAW).
– BarackObama.com

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Asian banks review US ties,  August 21, 2012

Cost will rise when tough new rules on derivatives come into force

SINGAPORE: Asian banks are reviewing relationships with their US counterparts to avoid being caught by tough new American rules on derivatives trading that are about to come into force.

From the start of next year, non-US banks that annually deal in at least US$8bil worth of products such as interest rate swaps with American counterparties are expected to be subject to new derivatives rules in the Dodd-Frank Act.

In practice that means they will need to register as swap dealers with US regulators and abide by their rules on capital requirements and risk management, all of which adds to costs.

“If I have the choice, I just don’t want to deal with a US person’,” said a treasury manager at a regional Asian bank.

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With a weak economy, massive debt and high unemployment, are accusations against a small minority of being financially greedy the best means of improving the economy or even increasing political power?  The latest propaganda from the US government seems to lean in that direction:

“I’m a Romney girl, in a Romney world. Life is taxless. It’s fantastic,” sings the fictitious Miss Swiss
The Globe and Mail

Such talk may very well appeal to masses of poor people who are struggling to meet their daily needs in a weak economy.  They certainly have much more serious things to worry about than to question the propaganda being fed to them by their government.  Thus, they may not realize that “Miss Swiss” isn’t even Swiss, or that the video clip “I’m a Romney Girl” is not real.

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UPDATE: Please see Jefferson D. Tomas’ translation of this article.

The warning applies to any Swiss bank employee with access to customer data.  They are being threatened with arrest in the US, France, Germany, Austria and Italy.  However, the article writes that they are unlikely to be threatened with a punishment but rather that they may be called as witnesses.

Anwalt warnt Schweizer Banker vor Verhaftungen „Ich rate, das Land nicht zu verlassen“
FOCUS Online

I got a letter in the mail from the IRS stating that a request for transcript of tax return could not be processed because of my address across the sea.  So, I called to correct the address, corrected it and then later got another letter from the IRS stating that my non-US address still didn’t match their records, which is still the case today.

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August 3, 2012
Bergen, Norway

I was sitting across from an impossibly blonde account executive this afternoon when I heard three words I never thought I’d hear at a foreign bank.

“Are you Greek,” she asked me with a bit of a smile…

me: “Uh, no. I have a US passport, among others…”

she: “OK good, as long as you’re not Greek.”

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Breitbartby Mike Flynn 2 Aug 2012
President Barack Obama, along with many Democrats, likes to say that, while they may disagree with the GOP on many issues related to national security, they absolutely share their admiration and dedication to members of our armed forces. Obama, in particular, enjoys being seen visiting troops and having photos taken with members of our military. So, why is his campaign and the Democrat party suing to restrict their ability to vote in the upcoming election?…

WKSU News August 3, 2012
Obama campaign sues Ohio over military voting
Fifteen military groups are opposing a federal lawsuit in Ohio brought by President Barack Obama’s campaign because they say it could threaten voter protections afforded to service members. Obama’s campaign and Democrats argue the law unfairly ends in-person voting for most Ohioans three days earlier than it does for military and overseas voters. They say such disparate treatment is unconstitutional, and all voters should be able to vote on those days. Organizations including AMVETS asked a judge late Wednesday to dismiss the lawsuit. They say federal and state law recognizes military voters need extra time. They fear a court could find that service members shouldn’t be treated differently. Most Ohioans have until Friday evening before Election Day to cast a ballot in person. Military voters have until Monday.

Hey Obama, what about “equal treatment” with day care, medicare, unemployment benefits, income taxes, property or even retirement savings?  Maybe this explains why certain interests don’t want for expats to be able to easily vote at their local base or consulate.   Under the concept of “equality”, why can’t all voters have the option of voting “in person”?

Researching the subject of “second home” in relation to American expats reveals that a “second home” is any home that is outside of America.  Costa Rica is said to be the most popular place for Americans to retire to their “second home“.  South-East Asian countries are seeing foreign retirees as “second home” purchasers.  Spain is considered as being one of the most popular places in Europe for a “second home”.  All of this gives one the impression that the a “second home” for Americans is any home that is not in America.

Yet, if an American living abroad seeks to buy their one and only single-family home in America, they are told that such is a “second home” or even an “investment property”.  With citizenship-based taxation on world-wide income, isn’t the one and only American home in America of an American their “first home”?  I would think so, but I’m told not.

I’m currently in the process of attempting to get a mortgage for my one and only single-family home in America as a “second home” and the entire effort is being threatened with a total collapse.  The problem is that the building insurance will only recognize it as being an “investment property”.  No problem, one would think, but this means that the American home of an American cannot be financed as a “second home” since it is insured as an “investment property”.  I explained that I might visit the property every now and then or even retire to it eventually.  Nope, that’s an “investment property” because it will be rented out, I was told by the building insurance.  I explained to them that I could leave the property unoccupied and live in it whenever I visited the area.  Yet, then it won’t be insured and if it’s not insured then it cannot be financed.

I thought that I was doing a good thing.  I wanted to invest my tiny American inheritance into America by getting a mortgage to help the troubled housing market and I fought my way past all the puzzling hindrances all the way to closing, such as foreign address issues, language issues, currency issues, tax issues, etc., only to learn that it might not close because my American home is a first or secondary home investment property conflict doomed for failure, thanks to the building insurance which states that “it’s the law”.

If that wasn’t bad enough, banks in Switzerland are telling me that they won’t finance my “second home” in Switzerland for the sole reason that I’m considered to be a “US person”.  Never mind my high credit ratings in the US and Switzerland.  Never mind that I have no criminal record in the US or Europe or anywhere else.  Never mind my qualifying income.  Never mind that I was honorably discharged from the US military.  Never mind the current inability to purchase a first or second home in America without it being defined as an “investment property”.  So, what now with one day left to go?

Well, following the advice of the lender, I went to another agency and answered the questions asked without volunteering any additional information, receiving the HO-3 Policy required to purchase a “second home”.  The price is the same and the conditions are pretty much the same, with the only difference being that the property insurance meets the requirements of the loan without the “abroad” identity being identified.

ForbesThis is a guest post by Jochen Vogler, CFP, an executive director at Bellecapital International AG, an SEC-registered Zurich, Switzerland-based independent asset manager.

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.

I called GE Money Bank AG today and was informed that they do not provide banking services to Swiss citizens in Switzerland who are considered to be “US Persons”.  GE Money Bank is a division of GE Capital which is a unit of General Electric, “an American multinational conglomerate corporation incorporated in Schenectady, New York and headquartered in Fairfield, Connecticut, United States”.^[1]

You are hereby confirming that you are a non-US person, i.e. that you are not a US citizen (sole, double or multiple nationality), that you do not possess resident alien status (for example because you are in possession of a Green Card or because you have regularly resided in the USA in the current year and the previous two years) and that in accordance with the provisions of US tax law you are the beneficial owner of the assets held by you and of the income generated by those assets. Insofar as a double taxation treaty exists between the USA and your country of domicile as a client, the bank will in principle accord you, as our client, a reduction of the US withholding taxes on income from US sources. In such a case, the bank is entitled to ask you to produce additional documentation.
GE Money Bank Savings (see info button to the right of “confirm that I am a non-US person.”)

Other banks that I have called so far who refuse to provide banking services to Swiss citizens in Switzerland considered as being “US Persons” are:

• GE Money Bank (US bank.  Doesn’t finance mortgages, but refuses to provide banking services to Americans)
• Raiffeisen (might finance Swiss citizens who live in the States)
• Bank Coop
• AXA Bank
• Migros Bank (unless the minimum account balance is $250’000 or the mortgage is above $700’000)
• NAB
• Valiant Bank AG
• Rothschild Bank AG (probably not, but unsure)
• SwissLife (investment products, mortgages)
• Hypothekarbank Lenzburg (see signature on every web page)
• Swissquote Bank
• FinanzZentrum Jungfrau AG
• Vontobel (Doesn’t finance mortgages, but US persons are prohibited from accessing the web page)
• Bank Sarasin, under the condition that the mortgage is matched with assets (US persons are prohibited from accessing the web page)

Banks which are stated that they were undecided are:

• Bank Thalwil (as of 28.08.2012, but US persons are prohibited from visiting their web site)
• Bank Linth (conditional, but their web site states that investments and other transactions are not for US persons)
• Alpha Rheintal Bank AG (only accepts regional customers, including maybe US persons)
• Julius Baer (refuses to provide financial services to  US citizens, but I need to inquire on mortgages with dual citizens)

Banks which provide Swiss citizens in Switzerland banking services regardless of the fact that they are considered as being “US Persons” are:

• Basler Cantonal Bank (refuses to provide financial services to  US citizens)
• Vaud Cantonal Bank (waives foreign account fees for Swiss citizens living or working abroad)
• Aargauische Cantonal Bank (closing the accounts of US persons)
• St. Galler Cantonal Bank (closing the accounts of US residents)
• Zürcher Cantonal Bank (does not finance mortgages for Swiss citizens who live in the US)
• Credit Suisse (refuses to provide financial services to  US citizens)
• Hyposwiss Privatbank (As long as W9 is completed)
• UBS (Baden branch, but American citizens are being denied banking services)
• Postfinance (does not provide credit to Swiss citizens living in America). It’s partners, Valiant and Münchener Hypothekenbank don’t want US persons.
• SwissLife (insurances)
• AMFIE (according to CERN)
• Credit Mutuel in St. Genis-Pouilly (according to CERN)

Those denying banking services to Swiss citizens have no official statement of such.  They are acting upon recent internal instructions which they will not release to the public.  I was told that SwissLife has an official statement on the matter, and I found one on a mortgage application:

The customer is not a “US-Person”.  That means, he/she is not a US citizen (single, double or multiple citizenship), that he doesn’t have the status of being a foreign resident (“resident alien”) , has (for example the possession of a “Green Card” or any regular stay in the USA in the current year or last two years).
SwissLife Mortgage Application

Both the US embassy in Bern and the Swiss Department of Finance stated that the action taken by the banks is legal and advised one to communicate the matter with US representation.  After being informed that US politicians are not responding to Americans abroad, the US embassy in Bern recommended contacting the ACA lobby.

The US government writes that it is a federal crime to deny a US person a mortgage because of their national origin, and yet the US government is forcing this federal crime upon US citizens as a result of citizenship-based taxation.