“Organisation of Swiss Citizens Abroad” denounces discrimination by Swiss banks.

Again, for those francophones amoung our readership, here is an interesting article.   http://www.lematin.ch/suisse/Des-Suisses-de-l-etranger-sont-discrimines-par-les-banques/story/12732075 

Translation of the byline:  The Council of Swiss Citizens Abroad is preparing a resolution to denounce certain Swiss banking practices.  The text, which shall be submitted this Saturday to a vote of the Council’s 140 delegates, asks that Swiss Citizens domiciled outside of Switzerland (approximately 700,000 people) are treated in the same way as other Swiss persons by Swiss bank establishements.

The Q&A goes on to discuss Swiss banks who have refused to open accounts for, or closed the accounts of, persons living in the US, and mentions that there is cross-contamination of the problem to Swiss living in non-US jurisdictions.

“Le Conseil des Suisses de l’étranger prépare une résolution pour dénoncer certaines pratiques bancaires helvétiques. Le texte, qui sera soumis ce samedi au vote des 140 délégués, demande que les citoyens établis hors de nos frontières (quelque 700000 personnes) bénéficient du même traitement que les autres Suisses dans les établissements du pays.”


25 thoughts on ““Organisation of Swiss Citizens Abroad” denounces discrimination by Swiss banks.

  1. It is interesting to note that the Swiss Penal Code already has an article that could be used against banks (especially if the affected person is also a US Person).

    Art. 261bis “Discrimination raciale” …….

    celui qui aura refusé à une personne ou à un groupe de personnes, en raison de leur appartenance raciale, ethnique ou religieuse, une prestation destinée à l’usage public…

    sera puni d’une peine privative de liberté de trois ans au plus ou d’une peine pécuniaire.

  2. FATCA is rapidly becoming the 21st century equivalent to the Bubonic plague which started in China in the 12th century and quickly spread across the world. Perhaps the only way to control FATCA is an international agreement for each country to be the sole taxer of income earned within its own sovereign borders. That would be a hard pill for the US congress to swallow, but it could perhaps bring an end to citizenship-based taxation and this FATCA-propigated plague that is now spreading its deadly tenacles across the world.

  3. Jefferson, this is what we’ve been talking about for some time. If these banks are looking at Swiss Citizens living in the US, then they are honouring the rules of *RESIDENCY*, which I think is something that is discussed a lot on here.

    Swiss banks are nothing– almost every kind of financial account has to say NO to anyone living in the US, independent of nationality.

  4. @geeez Swiss citizens have the right to Swiss health coverage wherever they are (but they have to pay for it). Swiss abroad may have businesses, property, or family in Switzerland, so it makes sense for them to maintain accounts. The denial of such accounts is not unlike the denial of US accounts to US persons living abroad. I believe that Swiss citizens in the US are particularly affected because Switzerland is in such a spotlight.

  5. There is probably no other country on the face of the earth that recognizes the importance to that country of its expatriates and Diaspora than Switzerland. It is a two-way loyalty reflected both by Swiss abroad to their home country and Switzerland to is citizens and their descendants abroad. It was my privelege to be invited to lunch by the Swiss abasador to the US at his residence in Washington a few years back – long before FATCA. – along with other members of the ACA delegation in Washington at that time for meetings with Congressional staff. It was arranged through one of our ACA directors who lives in Geneva. The Ambassador made it clear that Swiss abroad are generally very diligent in keeping their embassies around the world informed as to their addresses abroad and parcitipaing in the annual meetings of Swiss Citizens Abroad that are held in Switzerland every year, and how these are useful in both exchanging ideas with the Swiss government and influencing Swiss international policies. In answer to my question as to what languages were used in these meetings he stated “Whichever language the person speaking is most comfortanble in using,”

    Contrast this with the lack of a meaningful relationship between the US Government and US citizens living abroad, which is almost non-existent. Fear of the IRS drives Amercans abroad to go out of their way to not keep the US Embasses informed of who they are and where they live, and not to register their children born abroad with the US embassy, particularly if these children have one non-US parent and are likely to grow up in continue to live in that country.

    You only have to look at the bottom line figures of foreign trade balances to understand what this difference really means. Switzerland has a 12 month world trade surplus of $26.7 billion and a February unemployment rate of 3.1% – the lowest in very many years. The US trade deficit is $744.5 billion and an unemployment rate of 8.6% Exports represent 8.9% of US GDP whereas in Switzerland they account for 50%. The presence of Swiss citizens abroad is a key to the ability of Switzeland’s outstanding success in selling its higer priced products in the export market. Switizerland is currently negotiating a free trade agreement with China which, when signed will likely result in a reduction in the US share of that market, by making the landed costs of higher-priced Swiss products more competite with US products. There are a number of products for which Switizeland and the US are direct competitors in foreign markets.

    Recognizing the very close relationship that exists between Switzerland and its Diaspora helps in understanding why Swiss citizens in the US have become so concerned about having their Swiss bank accounts closed down (as a direct result of FATCA) and are seeking the help of their own government to find a solution to this problem, the cause of which is US law.

  6. Jefferson, I’m DEFINITELY NOT arguing with you about Swiss Citizens being in the spotlight. But I have seen a few rich Indians who were fined HARD with the FBAR, at least from what I gather on the DOJ website.

    Now I’ve had some time to think about it, and based on the Forbes’ author, it’s perfectly legit to be a US resident and have foreign bank accounts; they just have to declare them. So why Swiss banks would want to exclude them is beyond me. It must be scared of dealing with the US.

  7. @geez,
    I am sure that the Swiss banks that are excluding them is not because they are Swiss citizens, but because they are US residents and those banks have taken the decision to exclude US citizens and foreign residents of the US in order to not be burdened with the reporting to the IRS as required by FATCA. Some Swiss banks have, I undersand from a US citizen who lives in Switzerland, have established FATCA-compiant subsidiaries. The requremens for opening and maintaining an account in these FATCA-compliant subsidiaries is maintaining a $1 million minimum balance and paying a $1000/month service charge. This is to make it financially viable tor these Swiss banks to continue to serve these customers.

    I would suspect that this alternative is available to Swiss citizens resident in the US, but the minimum balance and monthly service fees may be too steep for many of them.

  8. @ Roger
    One of the big swiss banks, I think you can guess, told me personally that they will no longer keep accounts for anyone residing in the US, including mortgages, irrespective of nationality (including swiss). This was in the throws of the legal investigation so I somewhat assumed it was part of the deal made with IRS, and a bit too premature for FATCA at the time. Other swiss banks were and continue to follow suit. By the way, you can get account with said big bank, but they segregate you into the american section, and only if you have a legal swiss residence. I certainly do not pay the fees you mention or have that balance. So residence does seem to be the key. As an aside Swiss Post Finance closed the account of Julien Assange when it was shown that he did not have a Swiss residence.

  9. @nofatcat, Thanks for sharing your experience. Air is still full of dust and it will likely be some time before it settles. And just where it will settle is hard to predict. Since I neither live in Switzerland nor have, or have ever had a bank account there, I am only seeing the bits and pieces of anecdotal information that floats to the top.

  10. @Roger

    Supposedly there is going to be a meeting between ACA and the US Treasury Department “sometime” in April. I wouldn’t expect much to come out of it but I would look forward to at least what would be said.

  11. Re: Banking services denied to US ‘persons’. Came across this blog – with multiple stories of mortgages denied by Swiss banks to individuals on the basis of US citizenship.
    “Welcome to Switzerland.

    You can either blame the US Patriot Act or you can blame the Swiss protectionism. take your pick. Fact is, financial institutions don’t want to do business with Americans because of the breaches of privacy they are forced to commit in order to comply with US law.

    Either way, let your congressman back home know that the Patriot Act is inhibiting your life overseas. “

  12. As you are likely aware the US and Swiss governments have negoitiated amendments to the exisitng tax treaty between the two countries to facilitate the transfer of information on bank and financial accounts in Switzerland owned by “”US persons,” that is US citizens and green card permanent foreign residents. The banks would provide this information to the Swiss Government, which would transmit it directly to the IRS, rather than the banks providing this information directly to the IRS themselves. Supposedly, as I understand it, this would avoid the banks violating Swiss privacy and bank secrecy laws. FATCA obligates all foreign banks to provide this information starting in 2014.

    All tax treaties must be ratified by the US senate before they can take enter into effect. Senator Rand Paul, Repulbican from Kentuckey, a medical doctor; the son of Ron Paul who is currently a candidate for the Republican presidential nomination, has blocked Senate action on these tax treaty amendments, which I understand he can do.

    I contacted Senator Paul supporting his positon. Today I received an email reply and the following is the essence of his reason for opposition to these treaty provisions:

    “I have concerns that this treaty will allow the government to obtain a wide array of international banking records without evidence of such tax evasion.

    The Swiss Tax Treaty was placed on the Senate Executive Calendar, where it awaits a vote. However, I have placed a hold on this treaty until my concerns over privacy rights have been addressed. Again, thank you for contacting me with your thoughts. Please do not hesitate to contact me in the future regarding federal issues.”

    I agree with Sen. Paul.

  13. What is absolutely going to kill FATCA in Canada is the fact legislative changes need to be made to privacy law in not just Ottawa but possibly all 13 provinces and territories and especially BC, Alberta, Ontario, and Quebec. I just can’t see any possibility of Adrian Dix and the BC NDP going along with FATCA(whom will be the next BC government) nor do I really think anyone else including Dalton McGuinty or Allison Redford would either nor Darrell Dexter or Greg Sellinger. Its not even a question that lets say Christy Clark could some how ram through changes to the BC Privacy Act to help out her friend in the banking industry because Adrian Dix could simply undue them after the next BC election and cause Canadian financial institutions doing business in BC to fall out of compliance with their FFI agreements.

    Thus the only solution is intergovernmental agreement which could be a Charter violation. FATCA was really intended for Europe it never took into mind the North American system of banking and regulation despite it being US law.

  14. @Tim – Christy Clark better not even try to ram through changes to the BC Privacy Act. My fear is her own party replaces her, in an attempt to win the next BC election.

  15. @tiger

    The Canadian Bankers Association in their April 30th letter(which isn’t that interesting generally) is quite clear they need changes to legislation in all provinces and territories. Even if assume conservative and provincial government would go along I don’t think they will you have two NDP government right now in Manitoba and Nova Scotia. Then you have the next BC election coming up next year. Every province to get the legislation through would have to have at least one committee hearing after second reading. If the time came and it might its far easy to get 100 or so people against FATCA into a legislative hearing in Victoria than in Ottawa and basically “shut it down.” No BC Liberal MLA before an election when they polling quite badly is going to take a look at a 100 hundred angry people in front of them and vote for legislation they oppose. I should though get a list that if Christy Clark tried to change BC Privacy legislation what committee and which MLA’s would handle it.

  16. @tiger

    It might actually be worthwhile for some Brockers out in Vancouver to setup a meeting with BC Privacy Commissioner Denham on FATCA. Her office is in Victoria but I am assuming she is available for meetings with concerned individuals in Vancouver. Part of the job of the privacy commissioner is public outreach and I suspect you could get quite a few people in Vancouver to want to attend.

  17. Senator Paul bases his arguments on the Constitution.

    Jack Townsend recently wrote:

    “Senator Rand Paul is blocking Senate approval of the U.S. Swiss Treaty protocol recently negotiated to offer the IRS greater access to Swiss bank account information. He can’t block forever so that it is at best a quixotic delaying adventure. From a legal perspective as I understand the law, HIS ARTICULATED CONSTITUTIONAL BASIS FOR THE ACTION IS FRIVOLOUS. No court has ever held that there is a right of privacy to banking records. (At least Paul is admitting that there is a right of privacy that he wants to stretch in a new way to include banking records.) At worst, his conduct is unprosecutable tax obstruction, under the cloak and protection of congressional privilege, because it will delay and impair the IRS’s ability to administer the tax laws. I am sure he knows that. Does he really want to expand the living Constitution to give a right of privacy to banking records? Or is his gambit is to permit some statutes of limitation to close for some of his constituents (voters or contributors) while he delays (and obstructs) the implementation of the protocol?”

    I support Senator Paul and disagree with Jack. His comments disappointed me. The last time I checked, the Constitution was the supreme law of the land — but according to Jack, the Constitution is now frivolous?

    Here lies the problem, the United States has clearly lost its way. It has forgotten its founding principles — the government has in effect, become un-American.

    I am proud to have renounced US citizenship.

    I will forever be an American and cherish my American principles.

    Take note Al Lewis.

  18. @Tim

    Thanks for the info. Perhaps a letter to our Privacy Commissioner is in order. I believe there are a few of us here in Vancouver – Bubblebustin, myself and Arrow (I believe he might still be away).
    The ‘silence of our politicians (both federal and provincial) is deafening’. I don’t know how to read the silence. Sometimes I think, oh, this a good thing – they aren’t caving in and other times, I just want some answers before I take the next step. I have never been known for my patience. Just ask my kids!

  19. @Tiger

    We have the law on our side and the politicians federal and provincial can’t change it easily and quite possibly not all under the constitution. My sense is you might be able to get a meeting in Vancouver with the BC Privacy Commissioner herself without having to travel to Ottawa where no one but Schubert lives. I might start sending emails my self to all of the different provincial privacy commissioner to see where they stand on the issue.

  20. @badger As to denial of accounts in Switzerland to bona-fide residents, see Art 261bis, Swiss Penal Code

    “…..celui qui aura refusé à une personne ou à un groupe de personnes, en raison de leur appartenance raciale, ethnique ou religieuse, une prestation destinée à l’usage public,

    sera puni d’une peine privative de liberté de trois ans au plus ou d’une peine pécuniaire.”

    [one that refuses a service intended for public usage to a person or a group of persons, because of their membership of a racial, ethnic or religious group shall be incarcerated for 3 years at most or fined] http://www.admin.ch/ch/f/rs/311_0/a261bis.html

    This should be a way to threaten a bank that tries to force account closure. For dual nationals, see dominant nationality defined by RS291 Art 23 “Swiss Federal Law on Private International Legal Matters”. http://www.admin.ch/ch/f/rs/291/a23.html

  21. @Tim The problem is that, until a forced account closure actually happens to you or somebody you know, it would neither be a good idea to show your cards in advance, nor likely that a lawyer would be really interested in anything other than just charging you consultation fees. For the lawyer to do something, I believe (s)he would need a ripe cause of action.

    In Switzerland, I think the first step in the case of a forced account closure would be to send a registered letter to the bank citing the law and ordering them to reopen the account within 48 hours, under pain of criminal complaint. Then, if no positive response, make a complaint at the nearest police post (Art 261 Bis CPS as above) which I would presume would be referred to the judicial police (detective service), and if that doesn’t work, contact the cantonal prosecutor’s office. If that still doesn’t work (and even if the prosecutor seems interested), and for those that don’t have great financial resources, most cantons have a legal aid office affiliated with the local bar association, where one can also apply for a subsidy to pay for legal representation. They also offer a free or reduced initial consultation fee, and can propose a lawyer.

    Everyone needs to research their local laws and make such a contingency plan based upon their own situtation, whether such plan be based upon the Canadian Charter, European rights legislation, or whatever you have in your country. That way, if a forced closure does occur, you will be ready to pounce, you will not panic, you will not hesitate, you will just run your checklist.

    It would be very important in such a situtation to keep a complete paper trail and copy the paper trail to indidviduals you trust in case of any malicious response to your efforts.

    I believe it would also be important to think out of the box in such a situation and not to believe everything the first lawyer that you see might advise you. Work the administrative officials at all levels, work your politicians, get 2nd and 3rd legal opinions. Especially if you are a citizen of the local non-totalitarian country, do not hesitate to make yourself known as a royal pain in the a%% who will not stop until the issue is resolved.

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