OffshoreAlert
Daily news, documents and intelligence about Offshore Financial Centers and those who conduct business in them that you will not find anywhere else.
RSS Feed Print
about New US Swiss tax treaty
Internal Administrator
Posted: Saturday, August 13, 2011
Joined: 10/12/2010
Posts: 5780


Posted: 9/24/2009 10:59:09 AM

By: knightmare3000

Today( September 24,2009) it was announced in the local Houston Chronicle newspaper that there is a new US- Swiss tax treaty. it specifies that it is NOT RETROACTIVE. however it states that it gives US Treasury broad powers to look into Swiss accounts for suspected tax cheats. it specifies that specific account numbers must be known. the US treasury can not go on a blanket witch hunt. so far all well and good. however as a former client of Credit Suisse,here is what the Swiss did: (My guess knowing well in advance what the USD was up to.) the big banks ( e.g. UBS, Credit Suisse, SBC) ,that have the largest concentration of US clients, GOT RID OF ALL US CLIENTS. they did this by September 21,2009( that was my deadline to get out of the bank) about a day or two before the treaty went into effect. My guess is that most Swiss banks WILL NOT accept new US clients. Now then what does all this mean? IT MEANS THAT THE TREATY IS MEANINGLESS AS FAR AS THE SWISS ARE CONCERNED. WHY? because they got rid of all US clients--whether they were compliant or not--before the treaty went into effect.since the treaty is not retroactive,then if the banks don't take in anyone new,then guess what? the US TREASURY WILL NEVER FIND ANYONE that had a non compliant account. how is that for the Swiss being tricky?. since the assets/securities sold off were not US securities and were not transferred in US Dollars then it is impossible to trace who was there and where they went. so the new treaty--even if the US government wants to extend the time frame for compliance--is meaningless. the US clients are out of there ( two days before the treaty went into effect). the US clients are in new locales( see my previous entries on this board about where to go) and it can not be traced. so the treaty--although it was probably thought to be good--is worthless in finding any hard core tax cheats. my, my are the Swiss tricky. even if you were to contact your old account officer, then they will not return any calls to US clients. the money was out of there 24 hours before the treaty went into effect. . Surprising though,the smaller cantonal banks,seem oblivious to all of this. they got rid of many US clients years ago. they still allow the account to be open. but under their rules they can not talk with ANYONE--NOT EVEN THE ACCOUNT HOLDER--unless you set foot on Swiss soil. no matter what;no answer to anyone. now how is that for being a clam? this whole thing is comical. But the swiss while signing the treaty,secretly go rid of anyone and so no matter what the US Treasury does--it shall never affect them.. how is that for duplicity? best wishes.thanks for listening. I know David Marchand and David Lesperance have their own viewpoints,but remember that the Swiss got rid of everyone. the money is out of Switzerland by today. . so even if the US Treasury or US courts extend the compliance time , then it is meaningless gesture. it is a true "beau geste" on the part of the US. best wishes.


Anonymous
Posted: Saturday, August 13, 2011

Posted: 9/24/2009 9:48:51 PM

By: An Old Story

If you are so stupid as to deposit offshore funds into an account with obscure banks in Andorra, Uruguay, Latvia, etc., then you DESERVE to lose your funds when the bank suddenly disappears in the middle of the night, and then some guy calls you up and extorts $25,000 a month our of you to not turn over your account information to the IRS or other tax authorities.

In other words, even if you find the "unicorn bank" that will hide your funds, the most likely thing that will happen is that you will be speared by the horn ......


Anonymous
Posted: Saturday, August 13, 2011

Posted: 9/24/2009 3:14:52 PM

By: David S. Lesperance

Dear Readers: I will let knightmare's suggestions speak for themself. In short if you have a non-compliant account, you now have to face up to coming on-side or risk going way way down the rabbit hole where the solution is much worse than the problem being avoided.

David S. Lesperance
Barrister and Solicitor


Anonymous
Posted: Saturday, August 13, 2011

Posted: 9/24/2009 12:47:57 PM

By: knightmare3000

to still be non compliant, my guess is that they would have to try the 'gray market" for banks i.e. Andorra or Uruguay( they have no tax treaty with anyone). or try several of the banks in the "No-tell zone": Latvia,Montenegro,Roumania,etc. most banks there are "iffy" as to whether or not your assets would still be there.however if one had to do it or if one were at the point of suicide,then that might be the only resort in my opinion. the following is for academic purposes only: if they cleared out of Switzerland and took the proceeds of the account there in cash,then they could try to launder the money ( in cash) through placement in legitimate businesses( partnership) or objects of art. i.e. buy shares in a business ( partnership), buy real estate and/or buy works of art,jewelry,cars, rare watches,etc. they would have to pay cash, then only if they could find a willing ,desparate seller to accept cash payment. they would have something of their non compliant assets in a tangible asset, but they would no longer have a bank account. they possibly could find dealers for this world wide that would accept cash . or they could try to send the proceeds from Switzerland account in cash to an online account transfer agent like paypal or e-Gold ( if it is still around) . they would pay for these items( art ,jewelry,rare watches) on things like e-bay.it would be hard, but in the murky world of offshore deals and money launerding it could be done. if the person were a professional operator type ,then it could be done with the right "connections". they would pay a hefty fee for doing this however. most gray zone people want a cut of the pie to do things like this. if it is just a well to do matron or business man then they probably would get hurt physicially , "ripped off" by the mob / cartels, or "ripped off" a shady bank.I hope no one has to face that. good luck and best wishes. this is for academic purposes only.


Anonymous
Posted: Saturday, August 13, 2011

Posted: 9/24/2009 12:12:47 PM

By: David S. Lesperance

One glaring mistake in your post. Assuming that the non-compliants were forced out of Switzerland, where is the reliable Unicorn Bank where they could go, which will allow them to continue their non-compliance.

David S. Lesperance
Barrister and Solicitor


Anonymous
Posted: Saturday, August 13, 2011

Posted: 9/25/2009 7:01:25 PM

By: froggy

Border crossing from Switzerland to France /EU countries has been greatly facilitated since accession of Switzerland to the Schengen Treaty. The first port of entry into a Schengen country is where controls occur thereafter it is free movement of people and no customs (well there are always odd controls)...You should have stopped into Lyon....nice city known for its food and art de vivre...They also have some private banks there (Neuflize Schlumberger Mallet Bank, now part of ABN AMRO or BECM part of Credit Mutuel CIC group).

Would not advise anyone to travel with a suitcase full of gold or cash though...AML is still an issue that can be raised...

I am sure there are solutions for non compliant a/c that are far less dangerous than the one given in the post...

One way is to use a trust where the beneficiaries are straw men to conceal true identity of B.O..But that is too simplistic although it can be refined with several layers. Not for small accounts though...


Anonymous
Posted: Saturday, August 13, 2011

Posted: 9/25/2009 9:32:16 AM

By: knightmare3000

the previous messages are appreciated. I have always been compliant. My guess is that there are still a small percentage of well to do Americans who basically were stupid or naive into thinking that they could stay non-compliant. it is not all their fault however. this is a personal experience: when there was the Swiss-US tax treaty in the year 2000,Credit suisse let people know about the treaty about 1 year in advance. my account officer pointed out to me by phone that Credit suisse securities were to be considered non-US and hence would not have to be reported. they offered me the chance to let it be a non compliant account in so many words. I am serious about this. they actually said this to me over the phone. I think that there may have been some people who were foolish enough to believe that . Now those people are in 'hot water". so they should have contacted banks in Andorra or Uruguay to establish a fail safe account for emergency use.. or they should be willing to take a chance on banks in Montenegro,Latvia, or Roumania. if not, then they will have to get into money laundering. they could take their deposit in the Swiss bank as cash or gold. Store it in a safe facility/secure storage area in Switzerland. with current gold prices, 1 million dollars is about 1000 gold coins.. that would fit into a valise , brief case or a small box.. then they would offer themselves as "venture capitalists" or "financial angels". in other words place ads offering low cost business loans in the Paris edition of the International Herald Tribune or the Miami edition of Diario Las Americas. See who answers,. there are small businesses that are on the verge of financial collapse that shall take money offered to them in cash in return for a seat on the Board of directors of the company or a percentage of any future profits of the company.. the money paid to them is in cash or gold. since such companies are desparate,there are those who would take the money without asking any further questions. such deals would at most require a promissary note that would be between a person's lawyer and the company director. in some instances such financial gifts would be to a financially strapped bank or savings and loan institution. Certain financial institutions in Europe have been run by aristocratic families for years. such banks can hit hard times( e.g. mortgage crises,etc) . they need a financial backer. in return for a "suit case of money", they would offer you a seat on the Board of directors. if the valise or suit case contains gold coins ( e.g. Austrian Philharmonics coins denominated in Euros) then a lot of it would not be reported. it could be transported relatively easily.
I personally have taken the train from Zurich,Switzerland to the Lyon ,France border crossing. Customs at the border crossings is really a "joke". Baggage is NOT examined. Passports are NOT routinely checked. you just say you are an American in a "twangy" accent and the customs official nods his head . He then lets you through the crossing . so gold coins in a pouch ( say one million dolars which is about 1000 coins) could easliy pass non detected in a lady's cosmetic bag or in a man's valise that is not opened. Then on by train to a struggling bank in Northern Italy from a good,Italian aristocratic family that is cash strapped. so it could be done. however the original problem was the non compliance. My guess is that there were some that were 'snookered" by their account officers at their Swiss bank in the year 2000. what a pity they believed them. good luck. this post is purely for academic purposes. I do not recommend money laundering or anything illegal. best wishes .


Anonymous
Posted: Saturday, August 13, 2011

Posted: 9/25/2009 3:35:58 AM

By: froggy

I do not quite follow the post of Knightmare about non compliant accounts...And the non retroactivity of the new DTT...
About the non retroactivity : it covers only the request for information made before the new treaty not the fraud. A non compliant account, existing before the new treaty but discovered by the IRS after it, will be subjected to the new rules... Moving it, even before the new treaty, is not a proper solution. Information requested are more extensive under new rules then it will appear that you move it to another place...Bad start in front of an IRS attorney.

Assuming the bank decides to not provide info about a closed account is a dangerous proposition. They will recognise its existence in their books and the movements prior to the moving/closing down...The Swiss banks by closing accounts are just mitigating their reputational risk and shifting the blame to client first then to the accepting bank

If you really want to stay non compliant, you just have to sit tight and hope for the IRS not to find about it or about your fraud. So do not use credit card or fund your lifestyle according to what you declare.

Moving out of Switzerland to stay non compliant is a bet on the future and one will find that the bank charges will be extortionnate to hold such account. With few reputable and safe solutions.

Now let say you have a tax compliant account... One might find that the banks are charging more for compliance issues if you are a US citizen/resident/linked to and will have to accept this... The option is then to compare charges against returns... Switzerland's efficiency is at stake versus banking in the UK/USA or elsewhere.
Some private banks have decided not to accept US compliant accounts because their business model is too expensive. That is fine and acceptable.

Now one may wonder why a US tax compliant person would require a Swiss bank account, except those living in Switzerland or abroad... Efficiency in settlements, business purposes are the possible answers.


 

Jump to different Forum... 

We hunt for red flags in high-value, cross-border finance by monitoring offshore and onshore courts, regulatory actions, offering documents, and other sources - and email you the results.

View Recent Digests

BAHAMAS  
BERMUDA  
BRITISH VIRGIN ISLANDS  
CAYMAN ISLANDS  
Cayman Court Secrecy: A Huge Red Flag for Foreign Investors & Clients
David Marchant
As any fule kno, the biggest enemy of fraud, corruption, money laundering, and other forms of financial crime is transparency, while their best friend is secrecy. That's why the unprecedented mass sealing of cases that's taking place at the Financial Services Division of the Grand Court of the Cayman Islands is repugnant to anyone with a genuine concern for financial crime.