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.
>
>
-----------------------------------------------------------------------------
> To subscribe,
send a blank message to PrivacyWorld-on@mail-list.com
> To unsubscribe, send a blank message to PrivacyWorld-off@mail-list.com
> To change your email address, send a message to
> with your
old address in the Subject: line
> To contact the list owner, send your message to
By Michael, on May 30th, 2013 
