"GENEVA (AP) â The Swiss government announced Wednesday that it will let banks circumvent the country's strict client secrecy laws as part of an effort to end a long-running tax evasion dispute with the United States." http://news.yahoo.com/swiss-let-banks-lift-secrecy-us-tax-deal-120848069.html I'm not an economist, just a trading engineer. Can someone enlighten me as to what leverage the US has over Switzerland? The Swiss tradition of banking secrecy is centuries-old. What's changed that would make them modify their old tradition?
Banning them from the US market. If I recall, any bank who wishes to do business in the states has to comply with the American laws, including disclosures of clients' holdings.... ---------------------------------- "In January Switzerlandâs oldest private bank, Wegelin & Co, said it would close down for good after over 250 years of service, following its guilty plea to charges of helping prosperous Americans hide more than $1.2 billion from the Internal Revenue Service through secret accounts. A managing partner at the bank, Otto Bruderer, confirmed in court that "from about 2002 through about 2010, Wegelin agreed with certain US taxpayers to evade the US tax obligations of these US taxpayer clients, who filed false tax returns with the IRS." While it was unclear whether the bank was required to expose the names of the American clients who held secret Swiss bank accounts, "what is clear is that the Justice Department is aggressively pursuing foreign banks who [sic] have helped Americans commit overseas tax evasion," a former federal prosecutor involved in other Swiss bank investigations, Jeffrey Neiman, told Reuters." http://rt.com/business/swiss-banks-tax-evasion-918/
The US has been turning up the heat on them in the last 3-4 years. It was kind of just a question of time when they would comply.... Also: "Recent weeks have seen an unprecedented ramp-up of international efforts to put an end to banking secrecy. The Group of 20 major economies wants automatic exchange of tax information at a world level, and it wants it soon. The Organisation for Economic Co-operation and Development (OECD) is setting out the relevant international standards in the coming months, and the European Union wants to open talks on imposing fiscal transparency on all its members - and Switzerland - by 2015. The bastions of banking secrecy are caving in one after another â Luxembourg, Austria and even faraway Singapore. 2013 is likely to be the year in which Switzerland too hoists the white flag. " http://www.swissinfo.ch/eng/business/FATCA_sounds_death_knell_of_banking_secrecy.html?cid=35956046
Didn't the US bail out European banks? Maybe all they did was threaten to call their loans in? I'll bet that has happened thousands of times before. A banker is a fellow who lends you his umbrella when the sun is shining, but wants it back the minute it begins to rain. - Mark Twain A potential future scenario is that companies must declare citizenship as well and pay a minimum tax in that country for that right. If they earn in one country, it doesn't make sense that they avoid taxes by claiming to have their head office on a beach atoll somewhere with 10 people on it. If you tried to say you actually lived on that atoll and so were not really required to pay US taxes, then you would be in a black and white suit - prison garb. Those executives are similar - they wear tuxedos (also black and white garb) and are invitees to lavish resorts and parties while saying something similar. Tax should be paid where the money is earned and accounting nonsense should end IMO.
My god organised crime will be devastated too, along with, Somali pirates, tax dodgers, drug barrons etc. on having to pay taxes on their illegal earnings etc. !! BTW King George is probably having a good laugh !! Pay your taxes - or else you bums !!
An ET poster hinted that the US goivernment being on its knees was looking after any serious cash in the SAC's Cohen case. So looks like the poster had a point. This really sounds like desperation.
Seeing as the IRS is so intent on unveiling the secrecy of Swiss Banks perhaps they can do the same with the Domestic ones once they're finished with the International ones? $1.2 Billion -- that's it? Should be able to put a couple zeros after that for Domestic Banks.
I'd guess that $1.2Billion is the tip of the iceberg. From then they could follow up to the various tax heaven - where the real money is hidden. They have to start somewhere one would assume.