Category Archives: Issues regarding US persons abroad

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.

(Source http://www.taxesforexpats.com/expat-resources/foreign-tax-credit-american-expats.html)

(Source http://wikiposit.org/)
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In this article, tax issues are mentionned, but no word about the life destroying effects of FBAR, FATCA and double taxation on Americans living abroad.

Also, the mention of Kenya as a country that doesn’t allow dual nationality is wrong, since the new constitution voted in 2010.

When one passport isn’t enough, by Maria LaMagna

http://www.niagaraadvance.ca/2012/07/27/baird-rejects-us-nexen-concerns

Key Quotes:

A senior U.S. senator has called for a hard line on a state-owned Chinese company’s takeover bid for Canadian oil company Nexen, but Foreign Affairs Minister John Baird refuses to be pushed into anything.

“Decisions about the Canadian economy or about our economic relationship with China will be made in Ottawa, not in Washington or in New York,” Baird said on Friday.

His comments come after Sen. Chuck Schumer — a top New York Democrat — wrote to the U.S. treasury secretary about China National Overseas Oil Corporation’s (CNOOC) proposed $15.1-billion takeover of Nexen.

Schumer says Nexen’s operations in the Gulf of Mexico — U.S. territory — account for about 10% of its business, so any takeover by a foreign buyer would be subject to review.

Baird says he has “great respect” for Schumer, but doesn’t know if the U.S. can block the CNOOC-Nexen deal.

The minister also refused to link the Nexen takeover to securing greater access to the Chinese market.

“Obviously we’d like to see less trade barriers, more trade, more free trade that is unencumbered,” he said.  “We will continue to pursue that independently of this decision.”

“It’s all about Fairness”, Bank Coop wrote on the 23rd of May, 2007.

With its fair banking campaign, the medium-sized Swiss bank is emphasizing its conscious focus on broader society and offers good services at fair prices
It’s all about Fairness

In May, 2012, Bank Coop had 250 customers who lived in the United States.

Wir haben derzeit rund 250 Kundenbeziehungen zu Kunden, welche in den USA leben.
Generalversammlung Bank Coop, 2. Mai 2012

On July 17, 2012, Bank Coop declared that it was terminating the accounts of 250 US customers.

Die Bank Coop trennt sich derzeit von ihren US-Kunden – rund 250 Kundenbeziehungen werden liquidiert – und will im Bedarfsfall auch die Kündigungsfristen verlängern.
Tages-Anzeiger

I inquired on Friday, July 27th, 2012, if this ruling also applied to dual Swiss citizens who lived and worked in Switzerland and was informed that they are also denied banking services at Bank Coop if they are considered as being “US Persons”.  So, I searched for an official statement from the bank on the net, but could only find one on Equity Yield Notes.

EYNs may not be offered, sold or delivered within the United States of America or to U.S. persons except as permitted by the Prospectus.
Equity Yield Notes

On Securities, it writes that the purchase or sale is not allowed for customers who live in the US, but makes no mention of US persons in Switzerland.

keine Kauf- und Verkaufsaufträge für Wertschriften von Kunden mit Domizil USA entgegengenommen werden, wenn diese aus den USA ausgelöst werden.
Boersenauftraege

This leads me to the conclusion that they either haven’t updated their records, or they can’t since such would not be about “fairness” or it would be in violation of Swiss laws.  Swiss law allows banks to deny services to “politisch exponierten Personen“, which are high ranking government officials involved in money laundering.  Bank services may also be denied when the source of the customer’s money is questionable and the law prohibits banks from accepting money of criminal origin.  Yet, all of this doesn’t apply to Swiss citizens who work and live in Switzerland without being in violation of any laws but are simply identified as being “US persons”.  Bank Coop is likely reacting to the Wegelin situation:

Möglicherweise kam Wegelin nur deshalb unter Beschuss, weil die Amerikaner eine aggressive, sagen wir: imperialistische Auslegung der ­eigenen Steuergesetze vornahmen. Dass die Amerikaner dies taten, ist enttäuschend. Dass die Schweizer Behörden nichts dagegen unternahmen, ist erschütternd.
Die WeltWoche

In the case of Wegelin, the US government applied an imperialistic interpretation of its own tax laws, while the Swiss government failed to take action.

This will have a real effect if it applies to Canada. For the cash sitting in other funds, just spread them around and keep them below $50,000 each

http://www.thompson.com/public/newsbrief.jsp?cat=FINANCE&id=3907