BY GRANDPA, UPDATED TO AUG. 2013
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WHY SWISS BANKS NOW, AND MOST BANKS WORLDWIDE WON’T TAKE CLIENTS WHO HAVE ANY PAST-PRESENT-FUTURE CONNECTIONS WITH THE USA.?
Why is it that Swiss Banks for now — and probably most banks worldwide in the future, don’t want to deal with anyone who has any connection with the USA. Since 2009 and up until recently, Swiss Bankers would not touch American citizens, and green card holders (legal residents). In fact, many banks bluntly told their American clients that their accounts were terminated with this notice:
“Your account is closed. Please tell us where to send your money.”
The most valuable document in the world?
“CERTIFICATE OF LOSS OF NATIONALITY OF THE UNITED STATES”
At the end of the article is a link to the download.
It does apply to people living in their own country who are concealing accts abroad. Those days are finished. The foreign tax haven banks, buy treaty must send the home country info on all accounts. So a Brit living in London with a secret acct in Swiss or Monaco will now be reported.
IT GETS WORSE FOR AMERICANS
Now, as of 2011, in response to new regulations called the Foreign Account Tax Compliance Act (FATCA) and also criminal indictments filed in the USA against many banks and individual bankers, Americans are regarded as even more toxic than they were before. All Swiss bankers got together and decided that any connection with the USA taints a customer or prospective customer.
Stock brokers, Hedge Funds, Family Offices, Trustees, Investment Advisors, Financial Consultants, Coin & Precious Metal Dealers, Accountants, Wealth Managers as well as all Banks and Trust Companies will feel the impact of FATCA.
This article will explore in detail how this situation has come to pass. We will also look at possible solutions for Americans who may live abroad and who have now been denied access to banking and credit card facilities.
Note: Germans, French and English are or soon will be also toxic these days – unless they can prove residence in a tax haven outside of the European Union countries. However, this discussion will concentrate on the unique problems faced by Americans who have or want foreign bank accounts. Americans can’t escape reporting requirements and a tax on their worldwide income by merely moving abroad. Most lawyers believe Americans must renounce their citizenship to have financial privacy and assurance that they won’t be criminally prosecuted. This writer does not necessarily share that opinion. But more on the need fro renunciation later …
EVEN THOSE WHO HAVE A NEW, NON-USA CITIZENSHIP & PASSPORT , MAY BE REFUSED SERVICE
For the moment some Swiss banks will “make an exception” and accept ex-Americans who show documentary proof of renunciation of USA citizenship along with proof of foreign citizenship (i.e. a non-USA Passport). They will want to see a non-USA utility bill to back up as “proof of non-USA residence.” In some places they also require a copy of a non-USA income tax form or receipt to show you are “paying taxes somewhere” (other than the USA). Obviously residents of tax havens do not have to produce any tax returns. But formidable paperwork is commonly demanded to show that one has no past, present or future connections with the United States of America.
We further predict that American friendly places like Singapore will be dragged into the USA net one day in the not-too-distant future.
The only exceptions may be countries unfriendly to the USA like Chinese based banks (Bank of China) or financial institutions in places we dare not mention in print—lest they be shut down.
My guess is that in the coming years, all banks & brokers worldwide will want ever-more documentation from anyone who looks or sounds American. They are deathly afraid that they will face criminal indictments for conspiracy. aiding terrorists and facilitating money laundering. Of course, non-reporting, tax avoidance and tax evasion is the real issue.
WHY SHOULD AN OFFSHORE BANKER WORRY?
Why should an offshore banker worry about a criminal indictment in a country he has never visited and will never visit?
Answer: The USA, with the co-operation of INTERPOL will issue warrants for the arrest of these bankers. The next time they cross any border they may be arrested and held for extradition to the USA. Besides the criminal indictment, the USA Department of Justice can always seize the USA dollar accounts and USA securities held in the name of “non-complying banks” who do not fully report the activities of any clients who have or might have any American connection.
Up until recently, it was unthinkable that the USA or any country could pass laws and regulations that would be binding on companies or banks located abroad –especially if those banks had no offices nor places of business inside the USA. But after their success in collecting nearly a billion dollars in fines from the giant Swiss Bank UBS, the USA decided it could take on all the banks of the world with the dreaded new law—- FATCA.
FATCA (effective January 2014) says that all financial institutions (in the World!) must report full details of of any American clients with more than $50,000 to the IRS. Failure to do this will result in a special 30% withholding tax on the sale of any USA assets held by the banks. One result is that most banks are already dumping or refusing all clients who have any connection with the USA. It is not entirely clear who is an “American Person”. The definition seems to include ex-Americans, anyone born in America, anyone with investments in America, and anyone who ever lived in America. An offshore banker we (Grandpa) spoke to in September 2011 indicated that his bank, after ditching all American clients, would also start liquidating all American stocks and dollar holdings.
Thus, we observe, that at a time of financial crisis in the USA, the tax collectors are encouraging foreign investors to pull all their money out of USA investments altogether. The bankers say that this new law puts the onus on them to make investigations and take precautions that no Americans sneak in under the “know your customer rules.” Any unintentional failure to detect ex-Americans can mean huge financial penalties..
If anyone is suspected of being an American Person of Interest to the USA Treasury, they must be ferreted out and locked out—or else, the bank will forfeit 30% of its USA holdings. This makes American investments far more risky by a 30% factor, than they ever have been. On top of a fall in the credit ratings of American Sovereign Debt, and downgrades of most of the bigger companies, those in the financial services industry have good reason to ease out of dollars and the American securities markets.
IS THE USA GOVERNMENT SHOOTING ITSELF IN THE FOOT, AGAIN?
The high estimate of additional tax money that might come into USA coffers is about $8 Billion. But this is a pittance compared to the probable withdrawal of trillions in USA investments, and the loss of thousands of wealthy and productive American citizens. Thousands of rich Americans are already signed up for a six months wait to renounce USA citizenship. To many Americans, renunciation seems to be the only way to avoid potential criminal liability and giving up financial privacy. Note: Grandpa does not think this is the only solution!
GOING AFTER THE BANKS
When UBS told all their American clients to get out fast, the USA government got wind that UBS officers were funneling their old American reject customers to other banks. These banks included: a relatively small local cantonal bank, Basler Kantonal Bank. This bank serves as a good example of what offshore banks see as the coming USA juggernaut.
This Swiss regional bank which previously had few American clients, is now caught up in possible asset seizures and a criminal indictment. The head of the bank says he regrets taking on American clients after U.S.A. authorities forced rival UBS AG to hand over the names of suspected tax evaders.
Andreas C. Albrecht, chairman of the supervisory board of Basler Kantonalbank, told local the daily Basler Zeitung in an interview that his bank opened accounts for thousands of UBS customers after the U.S. tax probe against the Zurich banking giant UBS was announced. . “There were a lot of foreigners, including of course Americans who needed a new bank.”
“Looking back, I have to say it would have been wiser to close the door sooner for Americans, who only made up a marginal share of our business,” he said, adding that “the bank stopped accepting USA-based clients in March 2009.”
The USA Justice Department has ramped up an investigation of many Swiss-style banks with private banking operations. They say have enabled U.S. clients to evade billions of dollars in U.S. taxes over the last 10 years …
A broad investigation is now focused on Swiss financial giant Credit Suisse AG (CSGN.VX), which received a target letter from the Justice Department; London-based HSBC Holdings Plc (HSBA.L) and an array of smaller Swiss private and cantonal banks. The probe has widened to include banks in Israel, Liechtenstein and other countries as well, according to persons briefed on the matter.
On August 31, 2011 U.S. Deputy Attorney General James Cole sent a confidential letter to a top Swiss government official asking Switzerland to turn over by September 6 statistical information on the types of secret Swiss accounts held by U.S. clients at 10 banks with headquarters or branch operations in Switzerland, according to these persons.
Once this information is obtained, it is expected the USA will demand names of American clients and probably levy huge fines on the banks for conspiring to help Americans evade taxes.
U.S. officials are angry that the existence of the request was made public by two Swiss newspapers within days of the letter’s receipt by Switzerland’s Secretary of State for International Financial Matters, Michael Ambuehl, and the Swiss point-man for negotiating the showdown with the Justice Department, according to these persons.
THE TINY ALPINE PRINCIPALITY OF LIECHTENSTEIN IS A WELL KNOWN TAX HAVEN
American officials learned of Liechtensteinische Landesbank’s identity and alleged role through scores of voluntary disclosures made by wealthy Americans in recent years to the U.S.A. . Internal Revenue Service. The disclosures, which result in reduced fines and penalties in exchange for coming forward with secret offshore accounts, U.S. taxpayers are required to provide detailed information about the network of banks, trusts, shell corporations and intermediaries they have used. Many banks have been targeted as the result of disclosures by the 10,000 or so Americans who decided to “come clean” and pay big fines –but escape criminal penalties for not reporting their foreign assets.
In 2008, Mario Staggl, a whistle blower in Liechtenstein, was co-indicted with Bradley Birkenfeld, the former UBS private banker whose disclosures about tax evasion services at UBS resulted in the bank paying a $780 million fine, admitting to criminal wrongdoing and turning over the names of 4,450 of American clients — a watershed in Swiss bank secrecy. The American government seems to have shot itself in the foot by criminally indicting the whistle blowers, and refusing promised rewards for stealing their employer’s records. As a result of getting this stolen information, a U.S. Senate subcommittee report in 2008 detailed how a large Liechtenstein bank, LGT, owned by the country’s royal family, provided unreported banking services to several American billionaires.
Liechtenstein bank employee stole computer records of foreign customers and sold the stolen records to German tax authorities for $5 Million cash. The Germans in turn, sold or traded these stolen records to the USA, Great Britain, France and Italy.
The scrutiny of Liechtensteinische Landesbank turns a spotlight on the tiny Alpine principality of Liechtenstein, a noted tax haven with Swiss-style secrecy laws. Liechtenstein banks, trust companies and other intermediaries have figured in the background of indictments and criminal information charges against U.S. clients and Swiss bankers at UBS AG (UBS.N), Credit Suisse and HSBC, according to court papers.
Is This the Most Valuable Piece of Paper on Earth?
“CERTIFICATE OF LOSS OF NATIONALITY OF THE UNITED STATES”
Getting it was worth well over a billion USA dollars to each of the following:
Eduardo Saverin, Facebook Founder-
Denise Rich widow of Marc Rich
Steve Wozniak – a future Austrian
All it takes is the top 1% of USA Citizens to give up their passports & renounce citizenship; at that point the USA would have lost about 2/3rd of its wealth and about 90% of its most productive taxpayers.
This fact is forcing Big Brother to make it even more difficult to obtain this piece of paper, which in turn, makes it ever more valuable.
I now also have a copy of one that has been officially issued, stamped, signed sealed & delivered.
Going to the USA Government sites, I went on a ring -around -the-rosy for several hours without finding a copy of this document (relating to approved USA Citizenship Renunciation) It should be a public record. But if it is online at all, it was not anything I could find easily.
“CERTIFICATE OF LOSS OF NATIONALITY OF THE UNITED STATES”
FOR MANY AMERICANS, ACQUIRING A NEW CITIZENSHIP, RENUNCIATION OF AMERICAN CITIZENSHIP AND MOVING ABROAD SEEMS TO BE THE ONLY WAY TO SURVIVE FINANCIALLY.
FACTA type laws don’t apply to non Americans living away from their own country because all others are not taxed…
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