Switzerland says goodbye to light touch regulation
LONDON, May 3 (Thomson Reuters Accelus) - These days even the Swiss are fed up with their bankers. The financial crisis has riled Swiss citizens to the point that the Alpine country’s reputation for light-touch financial regulation will soon be a thing of the past. In a direct democracy such as Switzerland, where every citizen can vote on laws and even propose them, the people have spoken. What they have said is: we want more rules and regulation for bankers and asset managers.
“In the past people were against regulations which seemed too restrictive, but this is changing. The public mood is still critical vis-à-vis the banks and the culture of big bonuses for board of directors and management. Now we may see overregulation also because of the immediate political pressure facing a direct democracy,” Marc Raggenbass, head of the regulatory, compliance and legal practice at Deloitte in Zurich, told Thomson Reuters. (more…)
ANALYSIS-Asia next in line of fire for U.S. tax police
By Jason Rhodes, Kevin Lim and Joe Rauch
ZURICH/SINGAPORE/CHARLOTTE, July 7 (Reuters) – After forcing Switzerland’s top bank UBS to its knees for helping U.S. residents dodge taxes, U.S. authorities are moving on other banks and countries used to hide clients’ cash.
Washington inflicted a tough lesson last year on Switzerland by forcing the world’s biggest offshore banking centre to lift its treasured bank secrecy and slapping a $780-million penalty on UBS.
The Department of Justice is now going after other offshore centres like Singapore, which have attracted undeclared money that left Switzerland, and has opened a criminal inquiry into Asian clients of Britain’s HSBC Holdings Plc, Europe’s No. 1 bank.
Banks in Singapore and Hong Kong hold estimated offshore wealth worth $700 billion against Switzerland’s $2 trillion, according to the 2010 Boston Consulting Group Wealth Report.
“There are going to be more such cases,” a U.S. Internal Revenue Service source told Reuters. “There’s a lot of talk about money being moved from Switzerland into Asia.”
Swiss lawmakers last month backed a key tax treaty enabling UBS client tax cheats’ data to be handed over to the IRS, ending months of uncertainty that had threatened the recovery of the world’s second-largest wealth manager.
Seems to point out the obvious absurdity of our tax system that an agency of our government has to bully foreign governments to force private enterprises within THEIR borders and following the laws of their nation to accede to US law.
Seems to be way past time to junk the entire income tax system and implement the “Fair Tax”.
SPECIAL REPORT – How the U.S. cracked open secret vaults at UBS
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By Lisa Jucca
ZURICH, April 9 (Reuters)- After the collapse of Lehman Brothers in September 2008, Switzerland’s largest bank was teetering. UBS, which was more than three times bigger than Lehman in terms of assets, had to write down some $50 billion during that tumultuous period.
Investors the world over breathed a sigh of relief on Oct. 16 when the Swiss government rescued UBS. But unbeknownst to them at the time, the bank faced a potentially devastating crisis on a very different front.
One day after the bailout, top executives from UBS and Swiss regulators were summoned to a closed-door meeting in New York by U.S. officials who were conducting a wide-ranging tax fraud investigation that centered on the bank.
The UBS delegation, led by newly-appointed Group General Counsel Markus Diethelm, arrived armed with the results of an internal report highlighting instances of tax fraud within the bank, insiders told Reuters. The plan was simple: admit guilt, settle the case quickly and move on.
But Kevin Downing, the U.S. Department of Justice Tax Division Attorney who had been investigating UBS since the middle of 2008, chose that meeting to drop a bombshell: he wanted the bank to disclose names of U.S. tax evaders as a condition for a settlement.
IRS to take “macro” approach on U.S. foreign bank law
By Kim Dixon
WASHINGTON, March 2 (Reuters) – Foreign banks will likely not need to identify holders of millions of U.S. accounts individually, a top U.S. tax official said, in the run-up to a new reporting law aimed at catching wealthy tax dodgers.
The law, expected to be passed by the U.S. Congress in coming months, would slap a 30 percent withholding tax on U.S. income of foreign financial institutions if they fail to report U.S. account holders, among other provisions.
It comes amid sharpened focus on wealthy Americans stashing funds abroad, in particular after a landmark settlement with the Swiss bank UBS AG last year in which the bank admitted it actively helped Americans dodge billions in taxes.
“I don’t know how many millions it would be — but can you imagine trying to go account by account?” Steven Musher, associate chief counsel for international affairs at the Internal Revenue Service, said on the sidelines of a foreign bankers meeting in Washington.
Musher told the bankers earlier that the IRS, charged with implementing the law, would be looking at banks’ “macro processes” rather than expecting them to meticulously identify their millions of accounts.
Foreign banks have been lobbying to soften the law and complained about the cost of compliance.
France draws up tax blacklist, to apply sanctions
PARIS, Feb 16 (Reuters) – France has drawn up a list of 18 countries accused of failing to cooperate on tax issues, and will slap punitive taxes on certain financial transactions involving them, an official document showed on Tuesday.
The document, obtained by Reuters, was signed by Economy Minister Christine Lagarde and Budget Minister Eric Woerth and lists Central American and Asian countries as well as tiny Caribbean and Pacific island nations.
Dated Feb. 12, it does not mention any European countries.
Under a French law passed late last year, a 50 percent tax will be slapped on dividends, interest, royalties and service fees paid by a person based in France to a beneficiary based in one of the listed countries. This will be applied as of March 1. The previous tax was 15 percent.
A 50 percent tax will also be applied to gains from real estate and securities transactions carried out by persons or companies based in the listed places, according to the law.
The full French list includes: Anguilla, Belize, Brunei, Costa Rica, Dominica, Grenada, Guatemala, Cook Islands, Marshall Islands, Liberia, Montserrat, Nauru, Niue, Panama, Philippines, Saint Kitts and Nevis, Saint Lucia, Saint Vincent and Grenadines.
The document will be reviewed on Jan. 1, 2011, taking into consideration any progress in the listed countries’ compliance with global tax rules.
U.S. tax guilty plea involves unspecified major UK bank, Zurich banker
By Kim Dixon
ALEXANDRIA, Va., Feb 16 (Reuters) – A U.S. client of a big global bank based in England pleaded guilty to conspiracy in connection with assets stashed abroad to evade taxes, part of a widening crackdown on foreign banks and their customers.
The plea is the first among the government’s recent tax prosecutions that involves a major bank other than Swiss banking giant UBS AG. UBS last year admitted that it actively helped U.S. clients to hide money abroad.
Andrew Silva, of Sterling, Virginia, a doctor, pleaded guilty in U.S. District Court for the Eastern District of Virginia to conspiracy to defraud the U.S. government by hiding about $250,000 in a Swiss account of that British bank.
Dressed in a black suit and accompanied by a weeping woman, Silva also pleaded guilty to lying to U.S. customs authorities, who questioned him as he traveled into the United States with some of the money.
U.S. District Judge Liam O’Grady set May 7 for a sentencing hearing. Silva faces a maximum sentence of ten years in prison and a maximum fine of $500,000.
The name of the bank was not disclosed but described in court documents as “one of the largest international banks in the world” … “headquartered in England.”
Swiss minister says US insists on UBS tax deal – paper
ZURICH, Feb 11 (Reuters) – The Swiss government will probably have to turn to parliament to resolve a legal impasse threatening a deal struck with the United States to hand over data from UBS AG clients, a minister was quoted as saying.
The Swiss government had raised the option of parliament retroactively approving the deal, involving UBS clients suspected of dodging taxes, after a Swiss court ruled in favour of a UBS client seeking to prevent her account data from being given to the U.S. tax agency.
But the government’s preferred solution has so far been to negotiate a way out, hoping the United States would drop the issue if more than 10,000 UBS clients had turned themselves in voluntarily.
“I assume today that parliament has to get involved,” Justice Minister Eveline Widmer-Schlumpf told Swiss daily Blick in an interview published on Thursday.
“The United States insist that we stick to the fundamentals of the agreement. This means they want the some 4,500 sets of client data, which refer to cases of severe tax evasion and tax fraud,” she said.
Only some of a total 14,000 clients who have turned themselves in voluntarily to U.S. authorities are UBS clients, Widmer-Schlumpf said when asked if not enough UBS clients have turned themselves in, without giving a detailed number.
A spokesman for the justice ministry said talks with U.S. authorities were continuing, also declining to provide further details. (Reporting by Sven Egenter) ((sven-markus.egenter@thomsonreuters.com; +41.58.306.7351; Reuters Messaging: sven-markus.egenter.reuters.com@reuters.net))
Merkel tries to calm tempers in Swiss tax dispute
By Madeline Chambers
BERLIN, Feb 8 (Reuters) – German Chancellor Angela Merkel and Switzerland’s president have agreed that a dispute over stolen Swiss bank account data which Germany wants to buy should not harm ties between the neighbours, her spokesman said on Monday.
Merkel, who spoke to President Doris Leuthard on Saturday in an effort to calm tempers, also recieved assurances Switzerland would continue talks on a double taxation deal that would bring Switzerland into line with OECD standards.
Switzerland’s large private banking industry has been shaken in the last week by German politicians saying they would pay for data on clients of Swiss banks who may have been evading German taxes even if the information was obtained illegally.
“(Merkel and Leuthard) agreed that good neighbourly relations should not be damaged by this ongoing issue,” Merkel’s spokesman Ulrich Wilhelm told a news conference.
German media have reported the data could lead authorities to a 400 million euro tax windfall but the row has also raised the possibility of a diplomatic spat. Swiss politicians have attacked Germany’s plans, one even likening it to bank robbery.
Germany is Switzlerland’s main trading partner and home to a large client base for Swiss private banks.
German state ready to buy stolen bank data-source
BERLIN, Feb 4 (Reuters) – Germany’s most populous state has made final checks on stolen bank data belonging to potential tax cheats and is ready to buy the information, a person familiar with the matter told Reuters on Thursday.
“We have finished the examination,” said a source from the financial authorities of the state of North Rhine-Westphalia. “The groundwork has thus been laid to acquire the data.”
German Finance Minister Wolfgang Schaeuble sent shivers through the large Swiss private banking industry this week when he said Berlin was prepared to pay for stolen data belonging to potential tax dodgers at a Swiss bank.
The data could lead to the state raking in greater sums of money in tax evasion than previously thought, the Sueddeutsche Zeitung reported on Thursday, citing authorities.
German media had reported that the data on up to 1,500 possible tax evaders could lead to 100 million euros ($139 million) for state coffers.
Germany had already paid for stolen data in 2008 when it purchased information stolen from Liechtenstein’s top bank LGT, forcing the tiny principality to give up bank secrecy rules.
In an interview with Reuters earlier this week, Schaeuble said it was the responsibility of individual German states to decide what to do with such data.
European states keep Swiss bank secrecy under siege
By Jason Rhodes and Ben Berkowitz
BERNE/AMSTERDAM, Feb 3 (Reuters) – European states lined up behind German Chancellor Angela Merkel to expose tax cheats in a combined assault on the Swiss banking secrecy laws that help protect them.
German Finance Minister Wolfgang Schaeuble sent shivers through the large Swiss private banking industry this week when he said Berlin was prepared to pay for stolen data belonging to potential tax cheats at a Swiss bank, raising the bar in the fight against tax evasion.
Now, the Dutch, Belgian and Austrian governments have also flagged interest in obtaining a copy of a compact disc with tax-sensitive data that Berlin may soon buy from an informant.
Swiss Finance Minister Hans-Rudolf Merz said on Wednesday the Swiss would not help Germany or others hunt tax cheats on the basis of stolen Swiss bank data, but tried to defuse the escalating row by saying Berne would not retaliate.
“It is obvious that such a theft is a criminal act,” Merz said. “Switzerland should therefore not offer administrative (tax) assistance in such cases either now or in future.”
But he added that Switzerland would continue to engage in talks aimed at signing a new treaty with Germany.
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