Bank Secrecy Backlash Beginning?
Bank Secrecy Backlash Beginning?
There has been much debate and now that UBS has suffered the most debasing fate in the eyes of the Swiss, having to turn over the information of 4,500 of their clients to the IRS (USA).
Bank Secrecy
Could this really be the end of Bank Secrecy or offshore banking? Or the beginnings of a Backlash to add to the financial woes of the Bank Secrecy’s Article 26?
Lately there have been rumblings of Swiss Banks actually advising their clients from buying any US securities and also to divest them if they still have those. This is the backlash beginning as I had feared would occur.
Just like the extremism that has happened in the US customs of their treatment foreign visitors contributing to the huge drop in US tourism over the years since 911, expect the foreign investment of US securities to be choked off. Not only are the OECD rules of Article 26 being applied overly forcefully, but added to that the SEC rules being used to stretch that control across the US border too.
Imagine this: you buy XXXX US securities and make some good dime. Then you find Uncle Sam demanding who that was and wants to tax you. But…you don’t even live in the US…And it doesn’t take much imagination if the IRS came knocking on your institution’s door demanding everything to know about about that dead beat who did not pay his dues. If you think this may never happen, just think what the G20 and the IRS has already done through very strong arm methods.
Excerpts below are taken from the Sovereign Society…
[In 2000, the OECD completely revamped Article 26 (the much hated or loved Bank Secrecy Guidelines depending on which side of the fence you are on ) to expand the scope of information exchange between the "Soveriegn Nations" and the big brothers - G20.
These new Bank secrecy laws, dual criminality requirements, and domestic tax interest requirements could no longer be invoked to prevent information exchange. These provisions have gradually made their way into the international network of tax treaties.
There are still limits to Article 26. The OECD model only requires treaty signatories to exchange information on request. That is, the country requesting information must know that your assets or accounts are in a particular jurisdiction—and likely, in a particular institution—before it can request information.
Experts like the Sovereign Society warns that offshore bank secrecy laws will not protect you from having your account information turned over to your domestic tax authorities. If you have unreported offshore accounts, you need to deal with the problem now—not later. A good start would be a call to an attorney specializing in criminal tax defense.]
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