Saturday, June 1, 2013

Privacy World's June 2013 Newsletter Issue 1Jun

Subject: Privacy World's June 2013 Newsletter Issue 1Jun


> Privacy World - The WORLD'S SHREWDEST PRIVACY NEWSLETTER
> 
> Switzerland to Allow Its Banks to Sidestep Secrecy Laws
> 
> The Swiss government said on Wednesday that it would allow its banks
> to disclose information on American clients with hidden accounts,
> a watershed move intended to help resolve a long-running dispute
> with the United States over tax evasion.
> 
> The decision, which comes amid widening scrutiny in Europe of tax
> havens, is a turning point in what has been an escalating conflict
> between Switzerland and the United States.
> 
> Eveline Widmer-Schlumpf, Switzerland's finance minister, said the
> move would enable Swiss banks to accept an offer by the United
> States government to hand over broad client details and pay fines
> in exchange for a promise by United States authorities not to indict
> any banks.
> 
> Switzerland Weighs Deal in Tax Cases (May 28, 2013) -
> 
> Disclosure of actual client names and account data, which American
> authorities have been aggressively seeking, would take place under
> a taxation treaty between the two countries that the American side
> has not yet ratified. Banks under criminal scrutiny that agree to
> cooperate with the decision could still face deferred-prosecution
> or nonprosecution agreements, a lesser punishment than indictment.
> 
> Ms. Widmer-Schlumpf declined to say how much banks might have to
> pay. But she said the Swiss government would not make any payments
> as part of the agreement. Sources briefed on the matter say the
> total fines could eventually total $7 billion to $10 billion,
> and that to ease any financial pressure on the banks, the Swiss
> government might advance the sums and then seek reimbursement.
> 
> "It is important for us to be able to let the past be the past,"
> Ms. Widmer-Schlumpf said at a news briefing in Bern, Switzerland. She
> declined to give any details about the program, but said banks
> would have one year to decide whether to accept the American offer.
> 
> American clients whose names are handed over by Swiss banks but
> who have not voluntarily disclosed hidden accounts to the Internal
> Revenue Service would probably face criminal tax-evasion charges,
> lawyers said. Dozens of Americans have been indicted or charged in
> recent years for failing to disclose their accounts.
> 
> Until now, the Swiss government has been resisting cooperation
> because the secrecy of its banking system has long made country an
> offshore money haven for wealthy foreigners.
> 
> The country is also under growing pressure from the European Union
> to assist in ferreting out citizens who have sheltered money using
> offshore private banking services. Switzerland is not a member of
> the European Union, but nations including France and Germany have
> tired of watching their citizens squirrel away cash with impunity
> right across their borders.
> 
> The European Union is pushing member nations like Luxembourg and
> Austria to update their own secrecy rules, meaning the Swiss could
> soon be without an ally in the bloc and be left vulnerable to
> pressure from other nations.
> 
> Ms. Widmer-Schlumpf said the government would work with Parliament
> to quickly pass a new law that would allow Swiss banks to accept
> the terms of the United States offer, but said the onus would be
> on individual banks to decide whether to participate.
> 
> "If banks were not authorized to cooperate with the U.S. authorities,
> the initiation of further criminal investigations or charges
> concerning banking institutions could not be ruled out," a Swiss
> government statement said. It added that "the uncertainty for the
> financial center would continue to exist."
> 
> In 2012, the United States Justice Department indicted Wegelin &
> Company, Switzerland's oldest bank. The bank pleaded guilty in
> January, putting it out of business, and prosecutors have indicated
> in recent months that more indictments could be coming.
> 
> Calling the decision "a good, a pragmatic solution for the banks to
> emerge from their past," Ms. Widmer-Schlumpf said, "We expect this
> to create the base for banks to again gain some room for maneuver
> so that calm can return to the sector."
> 
> There is no certainty that Parliament would pass the law after
> two of Switzerland's biggest parties, the Social Democrats and the
> People's Party, voiced their opposition and a third, the Christian
> Democratic People's Party, said it disagreed with the urgency the
> new law was put forward.
> 
> Igor Moser, a spokesman for Zürcher Kantonalbank, one of about a
> dozen Swiss and Swiss-style banks under criminal scrutiny by United
> States prosecutors, said that if the Swiss Parliament approved
> the government's decision, the bank "will be able to agree on
> an individual solution with the U.S. authorities." He added that
> "a possible penalty will be part of this individual agreement."
> 
> Ms. Widmer-Schlumpf hinted that the repercussions for banks that
> actively helped clients evade taxes after 2009 would be bigger than
> for those that stopped such activities that year. "All banks knew
> after 2009 that they can no longer do all sorts of businesses,"
> she said.
> 
> It was in 2009 that UBS, the largest Swiss bank, agreed to enter into
> a deferred-prosecution agreement with the United States. The bank
> eventually turned over 4,450 client names and paid a $780 million
> fine after admitting criminal wrongdoing in selling tax-evasion
> services to wealthy Americans. Justice Department authorities were
> incensed that after the UBS deal, other Swiss banks took in American
> clients fleeing UBS to provide shelters for their income, according
> to court documents in cases of some indicted American clients.
> 
> Also in 2009, Switzerland and the United States signed a protocol
> amending a 1996 tax treaty governing exchanges of information on
> Americans suspected of avoiding taxes. While the protocol has been
> approved by the Swiss Parliament, it has been held up in the United
> States Senate, blocked by Senator Rand Paul, a Republican from
> Kentucky. The protocol makes it easier for American authorities to
> seek client and account data from Switzerland.
> 
> The Swiss decision on Wednesday to turn over any American client
> names appears to be contingent on the American side passing
> the protocol. The decision said any names release would "occur
> exclusively within the scope of administrative assistance procedures
> based on a valid double taxation agreement."
> 
> In the meantime, Swiss banks would be free to disclose to American
> authorities broader statistical data about American clients, like
> information about business relationships. Such disclosure would then
> pave the way for banks under criminal investigation to negotiate
> settlements with United States authorities.
> 
> "This is an important step for the banks; it will apparently allow
> them to disclose statistical information, such as the number of
> accounts with U.S. beneficial owners, the number of accounts with
> foreign corporations or foundations, and the amount of assets
> under management," said Scott Michel, a tax lawyer in Washington,
> D.C. "The I.R.S. and D.O.J. can use this information as the basis
> for financial penalties under settlement agreements, which might
> be deferred-prosecution agreements or nonprosecution agreements."
> 
> The decision also requires Swiss banks that cooperate with the
> Justice Department to protect their bankers and employees from, among
> other things, being fired for cooperating. American authorities have
> indicted more than two dozen Swiss bankers, lawyers and financial
> advisers in recent years.
> 
> Other Swiss banks that have been the targets of United States
> inquiries include Credit Suisse, which disclosed in July 2011 that it
> had received a letter saying it was under a grand jury investigation;
> the Zurich-based Julius Baer; two cantonal, or regional, banks;
> the Swiss operations of HSBC Holdings; and three Israeli banks,
> Bank Hapoalim, Mizrahi-Tefahot Bank and Bank Leumi.
> 
> Resolution of the conflict "has taken longer than it should have,
> with a lot of otherwise avoidable damage suffered on the Swiss side,"
> said Robert Katzberg, a white-collar criminal defense lawyer in New
> York with Swiss and American bank clients. "But it now appears the
> end is in sight."
> 
> The above artifice by Lynnley Browning and Julia Werdigier.
> 
> Until next issue, stay cool and remain low profile!
> 
> Privacy World
> 
> PS - Panama Virtual Account - Payment and Receiving Account with
> ATM Card! Email for details by placing "Pan-Vacc" in your
> subject heading.
> 
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