07/12/20

SWITZERLAND: At U.S. Behest, Swiss Pry Open Bank Accounts.

As published on finews.com, Friday 4 December, 2020.

The Swiss government told 13 Swiss financial firms that U.S. officials want their client data. The move represents American efforts to find money still being stowed offshore.

The Swiss tax office notified 12 Swiss banks and one fiduciary that the U.S. is asking for legal assistance in rooting out tax cheats, according to a government bulletin made public this week. The requests cite FATCA, a U.S. banking and tax law which is applied abroad.

The requests represent vestiges of American clients at Swiss banks which haven't agreed to a data handover. FATCA is an offshoot of a decade-long U.S. hunt for money hidden offshore, including in Switzerland.

Separately, U.S. and Swiss officials in 2012 agreed on a program for Swiss banks to come clean on undeclared accounts and avoid prosecution. Many of the banks listed in the most recent Swiss bulletin, like Vontobel and Mirabaud, elected simply not to take part in the program.

Pictet, which is also listed in the bulletin, couldn't take part because it is still in the crosshairs of a U.S. criminal investigation for its offshore dealings with America's wealthy. Other banks include Barclays' Swiss arm and Union Bancaire Privée, both of which did participate (UBP was recently sanctioned a second time by U.S. officials).

The remaining banks listed are CA Indosuez, Hinduja Banque, of which didn't take part, as well as Schroder & Co, PKB Private Bank, and Zuger Kantonalbank, which did. The Swiss fiduciary listed in the legal aid is Arofin.

Fibi, a defunct bank whose assets were bought by Compagnie Bancaire Helvetique, is also on the list, as is Notenstein La Roche, which was purchased by Vontobel three years ago.

Ostensibly lain to rest four years ago, the decade-long U.S. offshore tax scandal blew open again recently when a prominent Texan billionaire was indicted and several hundred million in funds in Swiss accounts linked to him were frozen.

The legal aid comes in response to requests from U.S. tax investigators under FATCA, or the Foreign Account Tax Compliance Act. Switzerland and the U.S. last year finally ratified a double taxation agreement, paving the way to cooperate.

Signed into law by Barack Obama in 2010, FATCA is hugely controversial because it has recovered just a fraction of the funds advocates said it would.

It has also ensnared scores of so-called accidental Americans: frequently citizens who never lived in the U.S. nor had any idea of their tax obligations in the U.S., and were taken aback that they were subject to often onerous back-reporting obligations to the Internal Revenue Service.

These «accidental» Americans typically face difficulties getting banking services due to their U.S. ties. A prominent Mishcon de Reya lawyer in London is challenging the law on data privacy concerns, «Spears» reported recently.