Friday, August 23, 2013

Update on U.S. Swiss Spat (8/23/13)

A recent Reuters article provides an update on the U.S. Swiss spat.  Martin de Sa'Pinto, Katharina Bart and Patrick Temple-West, U.S. looks to turn the screw in Swiss banks talks (Reuters 8/22/13), here.  Some key points in the article:

1.  The U.S. has tightened its negotiating terms, but, according to the article, "the stiffer terms did not include higher fines for culpable banks."

2.  The roughly dozen banks under active U.S. criminal investigation have been given "permission to hand over data to the U.S. that will allow them to avoid charges as they cut individual deals."

3.  The other 90 or so banks that likely have or have had U.S. evasion deposits are in "legal limbo."

4.  The U.S. leverage is increasing, according to Jeff Neiman, here, because of three "valuable tools:"  "a database of voluntary disclosures from U.S. taxpayers; a relationship with Liechtenstein to obtain information; and a lucrative whistleblower program to entice Swiss bankers."

5.  The uncertainty of the resolution will cause withdrawals from the Swiss financial sector.  That sector is "bracing for up to 200 billion francs in withdrawals in the four years to 2016, out of 789 billion francs of untaxed assets in Swiss banks, according to consultancy Zeb/Rolfes Schierenbeck Associates."

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