Credit Suisse CEO faces call for U.S. testimony apology (Reuters 2/27/14), here. Excerpts:
A group representing Swiss bank employees demanded an apology from Credit Suisse boss Brady Dougan on Thursday after he said the practice of helping Americans conceal their wealth was the work of a few dishonest employees.
* * * *
He said the wrongdoing appeared to have taken place before 2009 despite "industry-leading compliance measures" at the bank.
The body representing staff at Credit Suisse and other Swiss banks reacted with astonishment to Dougan's comments, saying it was "hardly credible" that the bank's bosses knew nothing of the practices.
"It was common knowledge that tax evasion was the strategy, a business model pursued by many banks for a long time," the Schweizerischer Bankpersonalverband said in a statement.
It said Dougan's comments "vilify lots of employees that had nothing to do with offshore U.S. banking", and demanded he apologize to the bank's 46,000 staff.
* * * *
Credit Suisse management has accepted responsibility for wrongdoing by its staff, while rejecting any suggestion that it was bank policy to help foreign clients hide their wealth from their governments.
"Credit Suisse repeatedly said that wrongdoing was centered around a small group of employees. This reflects the findings of our internal investigation as well as statements made by the SEC (Securities and Exchange Commission) in their order of February 21, 2014," the bank said in an emailed statement.
When the bank sent data on employees to U.S. prosecutors investigating its U.S. dealings last year, some staff voiced outrage and went to court to prevent Credit Suisse from releasing the data.First, I don't know the facts except anecdotally from an outside practitioner's perspective. Second, I have seen enough both in practice and in other sources that I can draw inferences that have a high probability of being fair. Third, the Swiss bank problem is so systemic -- not just U.S. enabled tax evasion, but similar acts and general skullduggery, all centered on Swiss secrecy -- that Credit Suisse had the culture that led to U.S. enabled tax evasion, similar acts and general skullduggery. Are the participating employees not culpable. No. Is the institution culpable. Yes. Does that mean that everyone in the Credit Suisse organization is culpable. No. But some are. And that some has to include management which allowed the general culture where such systemic behavior could thrive until they were caught red-handed and, not only caught, but caught by some power with the power to do something about it. The Swiss Government and bankers should have done something about this long ago. They didn't. They now will be brought to task. But it is not just rogue employees that should be brought to task.
Having observed the tax shelter operations of the big accounting and law firms, the Swiss bank behavior -- exemplified by UBS, Credit Suisse and others among the 14 (as well as Category 2, who can buy their way out) -- the Swiss behavior is much worse. In my opinion. For what it is worth.
Jack , money talks and of course everybody can buy their way out - this is the "american way of life" ...... the Swiss behavior is worse - no sorry much worse - could you please elaborate on this "phantasy" aka. opinion of yours.
ReplyDeleteIn your final paragraph you have not taken into account the holes in treaties and the tax credit mechanism. Taking just one example, "A" holds Swedish tax deferred savings accounts (pension and such), and these will not be US tax deferred. This indeed makes "A" a tax evader under US laws.
ReplyDeleteIt is true that FATCA does not change that. But what it does do is force the Swedish government to force Swedish banks to force "A" to deal with this. "A" has no real choice but to renounce US citizenship, because no Swedish bank now wants US citizens as customers. Here FATCA makes enemies of three separate aggrieved parties, for zero or negative financial return. Mission accomplished?
Another excellent, common sense explanation — no beating around the political bush.
ReplyDeletehttp://citizenshipsolutions.ca/wp-content/uploads/2014/02/NewZealandandtheExitTax.pdf
The US tax compliance professionals assisting us in with US tax law
or US accounting for our US tax returns OR the media person trying to tell the FATCA story so the general public can understand OR government representatives deciding what to best do for their country OR our family and friends really DON’T KNOW. The only ones who know that aspect are us — the persons living the horror of the US Person round-up.
It is as essential for others to know this aspect of FATCA as for us
to somehow effectively deal with our never-ending up’s and down’s of the emotional trauma we experience. There is an IQ needed to understand all this and I think, more importantly, an EQ (the Emotional Quotient of Intelligence).
Global Capitalism, In addition to your example of "A" bron in the US but who lived most of her life in Sweden, I can also foresee the example of "B" who immigrated from country X to the US, became a US citizen, but country X still wants B to file forms, pay taxes, and so on. Will the US agree to share the same data it is receiving through FATCA with country X? What if country X is Philippines or Eritrea (which do require their diasporas to pay taxes) What if country X is a country where US multinational companies do a lot of business and that country threatens to expropriate US assets if the US doesn't comply? Seems we are opening up a whole can of worms.
ReplyDeleteJack, in the Sweden example, there is more to it than just incompatible tax systems. What if as a result of failing to file the ForellBAR form those of Swedish parentage who lived in the US had to fork over 27.5% of their US assets to Sweden? (Forell means trout)