FATCA and Switzerland
Posts on The Isaac Brock Society website concerning FATCA and Switzerland
For articles on other websites, see Media and Blog Articles
For general discussion of FATCA, see FATCA Discussion Thread
October 2016
20: Ambassador Reaches Out to Swiss Banks
March 2016
14: Hillary Clinton Directly Enabled Tax Evasion in the Swiss Bank Debacle, I Kid You Not
July 2015
01: Very Swiss Vacations for the Federal Counselors
October 2014
May 2014
28: Updated Video: Rand Paul discussing US Swiss Tax Treaty with Senate Democrats
April 2014
08: Post Mortem of Vaudois League as to FATCA Referendum
March 2014
January 2014
December 2013
19: FATCA What’s-it? (Vaud League, Switzerland)
15: #Americansabroad in Switzerland should not enter #OVDP and join #FBAR Fundraiser
14: Most Swiss banks considering #OVDP should NOT consider #Wegelin in their decision
November 2013
24: Stopping FATCA in Switzerland
October 2013
19: FATCA: Breaking through Fear with a Swiss Referendum
02: Swiss REFERENDUM against #FATCA / Thursday October 3rd 2013
September 2013
09: FATCA IGA and Application Law Approved by Swiss Parliament
August 2013
30: It’s Official: New #OVDP program designed for Swiss Banks
June 2013
19: Switzerland voted against joining OVDI (Lex USA)
March 2013
21: US Renunciations In Switzerland for 2012
10: SWAT–Switzerland IGA: Still not enough information available in Switzerland.
February 2013
07: Switzerland Did Not Respect International Judicial Assistance Rules with the USA
January 2013
29: Packing up, going home: one US citizen in Switzerland vents his anger
14: UDC Parliamentary Deputy: “Switzerland has been too naive up to now”
November 2012
23: UBS asks “US persons” in Switzerland to Renounce Swiss Data Protection – Let the Outrage Begin!
05: Switzerland, threatened by isolation, lifting veil on secret bank accounts
October 2012
22: Tribune de Genève: Americans in Switzerland Tend to Support Barack Obama
September 2012
01: Criminal Complaint in Switzerland for Theft and Fencing Stolen Property
August 2012
23: Triple Referendum Launched in Switzerland Against Tax Treaties With Three European Countries
@Innocente: FWIW in the early 1990s I was a diplomat assigned to GATT, but in pre-WTO times such diplomats were nominally assigned to the country’s Mission to the UN. I worked at the Embassy one day a week for several months. (Interestingly when my Swiss-national mother came to visit and proposed to stay, it would mean (in those days) getting permission to live in the Canton of Geneva since her (and my, now) canton of origin was different. Although Switzerland apparently hasn’t acceded to Protocol 4, Art. 2(1) of the ECHR (“Everyone lawfully within the territory of a State shall, within that territory, have the right to liberty of movement and freedom to choose his residence.”) that practice was abolished. http://www.coe.int/en/web/conventions/full-list/-/conventions/treaty/046/signatures?p_auth=iLz96AaF ) Mom chose, in the end, to go back home.
(That clause and British law allowing the Government to prohibit certain citizens resident in Britain from traveling or living in Northern Ireland, or vice versa, was why Britain has signed but apparently did not ratify Protocol 4. It may be that “les Indépendistes du Québec” would like to restrict movement within Canada — they already exercise control over immigration from abroad — but at least so far, they can’t. FWIW I was there on the day of the last independence referendum.)
For the rest: I don’t know what the US Consular Agency in Zurich does. Years ago as a Consulate General it took care of Liechtenstein matters, no longer. Perhaps diplomats visit from Bern. Diplomats in Vaud are, of course, commuters. Many Geneva diplomats from poor countries commute from France. (I recall the story of an Algerian diplomat delayed unreasonably at the border, missing an important vote.)
The US Mission to the UN has a branch of UBS (SBS in the day) within its building. Diplomats don’t suffer the FATCA nuisance (they have to file, but the banks don’t hesitate to open accounts for them, even for rental guarantees). But then American discrimination against expatriates has always excepted: diplomats, missionaries, traders (in the traditional sense), mariners.
As for “functionaries”, as I said earlier I think that refers to career employees and officers of international organisations. Whatever immunity they have depends on their rank and the host treaty in force. That includes the Bank for International Settlements in Basel, the International Olympic Committee, Lausanne and doubtless many other organisations neither of us ever heard of.
@andy05:
To continue the discussion:
1) Diplomats/ Functionaries in Zurich: For 2012 and 2013 the statistics show four functionaries in Canton Zurich. Years 2010, 2011 and 2014 show zero for both categories.
2) Zurich Consular Agency: A report in a Swiss newspaper about two years ago said that the agency office was basically a front for NSA/CIA operations and that adjacent offices were packed with electronic equipment to surveil the banks in Zurich and trading companies in Zug. The agency presents itself as a limited-service office with limited hours.
3) Ci status: There were also 68 Americans (2014) with Ci status, in addition to the 2,126 American diplomats and functionaries. Ci status is defined as “The residence permit with gainful employment is intended for members of the families of intergovernmental organisations and for members of foreign representations. This concerns the spouses and children up to 25 years of age.”
4) Schooling/ boarding schools: Of the 2,126 American diplomats and functionaries in Switzerland, 664 are 0 to 19 years old. I suspect that some of these 664 might be children of those who are stationed in Africa and elsewhere in the world. I’ve worked with two Americans who were educated in Switzerland while their fathers were working for the State Department and US Aid in Africa. I don’t know how common this is but it might be a partial explanation for the large number of underage American diplomats and functionaries here.
I remain astonished at the large number of Americans with diplomatic, functionary and Ci status in this country.
Children of diplomats accredited to a country other than that where they are studying or staying do not get categorised as diplomatic family even if their passports are diplomatic (it is the visa, not the passport, that counts). Kim Jong-un of course used a phoney name and relationship and got away with it. As I said before, I think you are confusing American citizens and their families with a connection to an international organisation.
My recollection of the US consular office in Geneva is similar: it is (or was) a service office mainly for diplomats and staff assigned to other UN missions there.
But here’s some whimsy for you: After my time served as a diplomat in Switzerland (and because I speak the language) a Swiss consul friend told me I could qualify for facilitated naturalisation. Which I did, and most of my children too (one is married to a French guy, and is wavering. But she’d better hurry: the law changes next year.)
As for spies, what would I know. Geneva is the old Berlin I think. Zurich? Maybe to spy on the bankers and, like PFIC, give every advantage to Wall Street. Stuff leaks, you know.
BTW: I’d move to Switzerland tomorrow (I own apartments there) if it weren’t that my taxes would be more draconian: wealth tax, not deductible in any other country AFAIK. My eldest daughter and her son would too … except that she’s running for public office in another European country. What complexities we weave in live.
Since Fatca and the DOJ Tax Programme were introduced in Switzerland in 2012/ 2013, the number of Americans began to decline (all year-end):
2015: 17’576
2014: 17’954
2013: 18’204
Until 2012, the number of Americans in Switzerland had been on the rise for a number of years:
2012: 18’265
2011: 17’988
2010: 17’109
2009: 16’581
2008: 15’983
The birth rate of Americans born in Switzerland showed a sharp decline for 2015, after peaking in 2012. These are US citizen births reported to the Swiss government (and not necessarily to the US Embassy):
2015: 143/ 17’765 = 8.0 per 1’000
2014: 159/ 18’079 = 8.8
2013: 161/ 18’243 = 8.8
2012: 166/ 18’126 = 9.2
2011: 160/ 17’548 = 9.1
2010: 152/ 16’845 = 9.0
The denominator is the average population of US citizens for the year, e.g., (Dec 2015 + Dec 2014)/2 = Ave. US citizen population for 2015
One more.
The number of Americans naturalizing to become Swiss citizens has been on the increase since the US government’s crusade against Americans living in Switzerland began:
2015: 390
2014: 364
2013: 363
2012: 339
2011: 294
2010: 322
2009: 296
The US embassy is holding another round of town hall meetings. Next meeting is on the 23rd of February in Basel. More details can be found here:
https://www.facebook.com/events/726062127527965/
http://blog.democrats.ch/2016/02/ame…3-in-bern.html
This is an excellent opportunity to discuss US policy with the Ambassador
Second link is here: http://blog.democrats.ch/2016/02/america-day-feb-23-in-bern.html
http://www.rts.ch/info/economie/7486222-le-calcul-des-amendes-infligees-aux-banques-manque-de-transparence.html
The US plays to win, at any cost.
Significant section on Switzerland in this article;
Parada, Leopoldo, Intergovernmental Agreements and the Implementation of FATCA in Europe (June 24, 2015). World Tax Journal Vol. 7, No. 2, 2015. Available at SSRN: http://ssrn.com/abstract=2720182
Notice about the article was posted by Allison Christians at her blog;
http://taxpol.blogspot.ca/2016/02/parada-legal-questions-surrounding.html
http://foreignaffairs.co.nz/2016/03/01/new-fatca-exception-clause-for-accounts-held-by-lawyers-or-notaries/
‘Headline: New FATCA exception clause for accounts held by lawyers or notaries ‘
Questions:
But still reportable under FBAR?
Just lawyers and notaries in Switzerland? Don’t they have to grant favourable clauses to ALL of the same Model type signatories if one gets granted a better deal?
‘Une exception au traité fiscal soulage les avocats
Accord FATCA ‘
“La loi ne pourra pas être appliquée à des comptes gérés par des avocats ou des notaires.
Mis à jour le 01.03.2016 ”
http://www.lematin.ch/suisse/secret-professionnel-avocats-preserve/story/29689299
As to FATCA reporting exception for Lawyers’ and Notaries’ accounts, here is the official press release in English from the Swiss Federal Authorities: https://www.news.admin.ch/dokumentation/00002/00015/index.html?lang=en&msg-id=60824
And the text of the agreement amending the IGA: http://www.news.admin.ch/NSBSubscriber/message/attachments/43165.pdf
A quick calculation shows that US Persons in Switzerland, defined here as individuals born in the US and resident in Switzerland, are approx. 0.43% of Switzerland’s total population of 8.2 million. Mortgages outstanding in Switzerland total CHF 900.2 billion (2014). Assuming that US Persons have mortgage balances in proportion to their percentage of the Swiss population, this would calculate to be CHF 3.8 billion that would belong to US Persons.
There are reportedly two Swiss financial institutions that will provide mortgages to US Persons, UBS and Credit Suisse *. So, Fatca and the pre-Fatca US-Swiss tax programme may have caused CHF 3.8 billion of mortgage loans to be transferred to these two Category 1 banks. There is something ironic about this.
* – PostFinance is the third bank that will work with US Persons in Switzerland, However, it offers only transactional accounts to US Persons in Switzerland and does not offer mortgage loans to them.
@Innocente, not sure you can extrapolate the mortgage amount from the population figure. Most people here, Swiss and expat, rent property and don’t buy. With having to provide 20% of the purchase price yourself buying a house here is beyond many people’s means as property isn’t cheap.
Migros Bank is also said to have American clients – though they were throwing them out a few years ago iirc – and according to the Americans Welcome website do offer mortgages. Still I don’t think their site is particularly accurate as it doesn’t mention UBS at all and they still deal with Americans. They also say PostFinance will do mortgages, while a recent report on English Forum said an American couldn’t open a bank account with PF until they’d been here for 6 months and had a B permit. The cantonal banks of Zurich and Basel used to take American clients, whether they still do and whether they allow mortgages I don’t know.
Yeah, it’s quite ironic that all the hoo-ha has actually pushed Americans into using the two Swiss banks whose actions seem to have triggered it all in the first place.
Both Credit Suisse and UBS are reluctant to accept U.S. clients. One UBS branch told me that they won’t accept anyone who has anything financial to do with America. Credit Suisse was reluctant to state that they would accept an innocent child who, as they called it, was “taxed by America”. Some smaller local banks have stated that they will accept Americans. Yet, one never knows if they really will until one tries.
Innocente, Bern reports that there are 17’000 individuals living in Switzerland who were born in America. How many of them still have U.S. citizenship is unknown. Of course, there are also those who were born in Switzerland and are thus not included in that statistic.
In any case, for “American Day” in Switzerland, around 50 Americans showed up at Basel, Geneva and Zürich. One of the popular issues discussed was renouncing. Some attending were leaders of clubs and others were full-time mothers, students who didn’t earn much or retirees. Around 150 Americans also voted in the democrat/republican primaries.
So, it is safe to say that around 150 individuals with U.S. citizenship still reside in Switzerland.
I came across this thread discussing US person’s opening retail accounts at Postfinance recently, UBS and Credit Swiss are also mentioned on the thread. I also notice that SwissPinoy put his 2 cents in ! 🙂
http://www.englishforum.ch/finance-banking-taxation/249371-no-go-postfinance-5.html
Here is also an article from last September about Postfinance participation in the “Program for Swiss Banks” http://www.nzz.ch/wirtschaft/wirtschaftspolitik/der-seltsame-fall-der-postfinance-1.18669834
An Austrian newspaper, Die Presse, reported in April 2015 that 1,577 US citizens had given up their US citizenship in Switzerland in the first six months of 2014. Furthermore, it wrote that “several thousand” Americans gave up their US citizenship in Germany in 2014, following 3,000 renunciations there in 2013. The US Embassy in Austria recorded 150 renunciations in 2014, according to the article:
http://diepresse.com/home/wirtschaft/international/4701203/Steuerfreiheit-von-den-USA-Das-wird-mittlerweile-teuer
This is an update of a January 28, 2016, adding the figures at June 2016:
Since Fatca and the DOJ Tax Programme were introduced in Switzerland in 2012/ 2013, the number of Americans in the country has declined by 5.7%. Figures are all year-end except June 2016:
6-2016: 17’216
2015: 17’576
2014: 17’954
2013: 18’204
Until 2012, the number of Americans in Switzerland had been on the rise for a number of years:
2012: 18’265
2011: 17’988
2010: 17’109
2009: 16’581
2008: 15’983
The populations of Canadians and Australians, the two largest English-speaking populations from non-EU countries after the US, have steadily increased during this same period.
Another update. The number of Americans naturalizing to become Swiss citizens has been on the increase since the US government started its jihad against Americans living in Switzerland:
7/2015 to 6/2016: 435
2015: 390
2014: 364
2013: 363
2012: 339
2011: 294
2010: 322
2009: 296
https://www.sem.admin.ch/sem/de/home/publiservice/statistik/auslaenderstatistik/archiv/2016/06.html
Spreadsheet at 4-30 “Last 12 Months”
Non-Swiss become eligible to apply for Swiss citizenship after 12 years of residence in the country following the so-called ordinary naturalization process. Not surprisingly, eligible Americans in Switzerland have been obtaining Swiss citizenship at increasing rates since Kathryn Keneally, DOJ, and Robert Stack, Treasury, launched their concerted attacks on Americans in the country:
Percentage of Americans eligible for Swiss citizenship residing in Switzerland who obtained Swiss citizenship:
Jun 2016: 9.3%
Jun 2015: 6.5%
Jun 2014: 7.0%
Jun 2013: 7.2%
Jun 2012: 5.2%
Jun 2011: 5.4%
The number of US citizens in Switzerland eligible for Swiss citizenship has been quite stable over this period. It is the number of ordinary naturalizations by Americans that has increased:
US citizens eligible for Swiss citizenship (calculated):
Jun 2016: 2,963
Jun 2015: 2,983
Jun 2014: 2,954
Jun 2013: 2,978
Jun 2012: 2,971
Jun 2011: 2,965
Calculation method:
a. Swiss citizenship obtained through ordinary process is calculated by removing facilitated naturalizations from total naturalization figures, using figures at workbook 3-61, tab CH-Nati, as the numerator.
a. US citizens who have lived in Switzerland for at least 13 years, using figures at 2-23, tab CH-Nati, as the denominator.
https://www.sem.admin.ch/sem/de/home/publiservice/statistik/auslaenderstatistik/archiv.html
Got a nice letter from PostFinance the other day to say I need to fill in another W-8BEN form as they only last for 3 years. Stil, it seems it’s down to the individual FFI how they play this as UBS who I also bank with have not sent me a new form to fill in and they knew about my renunication months before PostFinance. Or could it be the different FATCA categories the banks opted for?
Also curious is that my husband hasn’t received a new form yet as our account is a joint one. He, however, has no US indica except for the fact he’s married to me.
As the number of ordinary American citizens in Switzerland (CH) continues to fall, the number of US diplomats and functionaries continues to increase. Here is an update on the discussion from January 2016 including 2015 figures:
2015:
Americans permanently resident in CH: 16,993
US diplomats, functionaries, Ci status: 2,263
2014:
Americans permanently resident in CH: 17,481
US diplomats, functionaries, Ci status: 2,192
2013:
Americans permanently resident in CH: 17,724
US diplomats, functionaries, Ci status: 2,059
2012:
Americans permanently resident in CH: 17,800
US diplomats, functionaries, Ci status: 2,114
US diplomats are partying hard in Switzerland while the rest of us are would be happy to just find a bank willing to offer a mortgage!
Source:
https://www.pxweb.bfs.admin.ch/Selection.aspx?px_language=en&px_db=px-x-0103010000_101&px_tableid=px-x-0103010000_101\px-x-0103010000_101.px&px_type=PX