Wednesday, March 19, 2014

U.S. Expects the Swiss Bank Initiative to Produce Information on Account Holders and Bank Professionals (3/19/14)

The following are some key points from a Tax Notes article, Jaime Arora, DOJ Doesn't See Barriers to Receipt of Information Under Swiss Bank Program, 2014 TNT 53-5 (3/19/14).

1. DOJ Tax AAG Keneally expects that information will be forthcoming about account holders and banking professionals under the U.S. Swiss bank initiative.  If that expectation is not met, " the program includes a clause that would allow the DOJ to terminate it."

2.  "In addition to the clause in the program allowing for its termination, the timeline of the program provides another safeguard, Keneally said. She said the DOJ will look at category 2 banks first and make sure the program is working before it moves on to the category 3 banks."

3. The U.S. will assist treaty partners seeking information on their taxpayers.  Keneally noted as an example the John Doe summonses for Norway.


  1. .......".we urge DOJ to at least attempt to use the authorities laid out in that treaty."....this is imo. a desperate letter from senators Levin and McCain that might sound good in theory but as you correctly pointed out in practice would require a lot of resources and manpower and since the presumption of innocent until proven guilty still holds true no guarantee that conviction, sentencing and incarceration would be even achieved in many of the cases.

  2. Americans and their money are toxic............

    from a major swiss bank just hot from the press :

    .........."I am sorry to inform you that we have been asked by General Counsel
    due to regulatory requirements to close all relationship with customers who are US Nationals . This means that we will have to close the account with us. Your understanding is appreciated
    We hope this is fine with you otherwise please come back to us for any question, which we are happy to assist or answer..............."


  3. Well, I don’t think the Senators have read the Swiss Federal Constitution.
    If aforesaid “bankers” are Swiss citizens they cannot be extradited unless they consent.

    Pretty clear facts !

    Article 25 Protection against expulsion, extradition, refusal of
    entry at the border 1 Swiss [citizens] cannot be expelled from the
    country; they cannot be handed over to foreign authorites unless they

    Levin, McCain… are you inciting more treason on the part of the Swiss
    Federal Council _ Respect the Constitution of Switzerland as you should respect your own.
    US officials only read constitutions when it suits them and in a manner that suits them.

    1. see article 3:

    2. The letter:

    The market has spoken: U.S. citizenship is worth 200 egg rolls

  4. From a article “American clients the losers in US-Swiss bankers row”:

    “BCGE, Geneva’s cantonal bank, has been sending letters to American
    citizens with accounts at the bank threatening to freeze the accounts if
    they do not immediately provide proof they have filed US tax papers, a
    move that a lawyer representing several clients is calling illegal. Marc
    Béguin tells newspaper Le Temps in an article published 18 March that
    the bank is creating confusion and making illegal demands with letters
    to clients where it does not distinguish between two key agreements:
    requirements for the banks that arise from the Justice Department
    agreement with scores of Swiss banks and the Fatca agreement that
    requires banks as of 2014 to announce foreign assets held by American
    “persons”, US citizens and green card holder.

    Meanwhile, an American family, resident in Switzerland, who renounced
    their citizenship a year ago tells me that their accounts of several
    years standing were unceremoniously closed by the BCGE recently without
    prior notice on the basis that they were once American. The bank then
    sent a bill for the time it spent going through their records to
    discover this.”

  5. Kathryn Keneally, Asst Attorney General, Tax Division, will look increasingly silly as the programme is revealed for what it is – an expensive undertaking that outs USC minnows working in Switzerland with normal current and savings accounts at retail banks and not “offshore” accounts. Last month she boasted in Arizona that the programme was
    identifying banks that had not been targeted, essentially confirming this.

    I remind myself that Kathryn Keneally, while a partner at Fulbright & Jaworski, worked to protect the heirs to the Ferdinand Marcos estate, a dictator who was implicated in murder of 10,000 dissidents. In addition to lacking morals, her poorly designed US Programme shows that she lacks common sense.

    Comments about 2 banks on the US Programme :

    1) Piquet Galland & Cie SA, category 2: This is a private bank in the French speaking area of Switzerland. The Galland part of the bank was owned by the Johnson family of Wisconsin (“Johnson Wax”) from 1976 until 2010. The Johnsons somehow had the foresight to sell it.

    2) Cembra Money Bank AG, category 3: This is a local consumer lender that was owned by General Electric until it was spun off several months ago (previously called “GE Money Bank”). There were various reports that it had a policy of not accepting USCs as customers, even though the USCs were resident in Switzerland. GE also showed foresight.

    An article in Agefi discusses the fact that US (private) banks in Switzerland have not accepted US customers, even if resident in Switzerland:

    “While none of the (US banks in Switzerland) has yet expressed its
    participation in the U.S. program, Raoul Würgler Oliver said that “some
    U.S. banks in Switzerland have long had a policy of not accepting U.S.
    customers” (read Agefi yesterday). The Assistant Secretary General of
    the Association of Foreign Banks in Switzerland indicated in this sense
    why they may not be worried by the U.S. program.”

    Is it a coincidence that the Johnsons got out of Swiss private banking after 34 years and that GE Money Bank and the US private banks in Switzerland did not accept any USCs as customers? Or did someone in the USG tip them off?


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