
Swiss say goodbye to banking secrecy - jonbaer
http://www.swissinfo.ch/eng/business/tax-evasion_swiss-say-goodbye-to-banking-secrecy-/42799134
======
JumpCrisscross
The joke in Switzerland is the U.S. Treasury took actions against Swiss
banking secrecy to defend its own business [1]. Indeed, Delaware and Nevada
are notoriously light on what paperwork they require to spin up an entity [2].

[1] [https://www.bloomberg.com/news/articles/2016-01-27/the-
world...](https://www.bloomberg.com/news/articles/2016-01-27/the-world-s-
favorite-new-tax-haven-is-the-united-states)

[2]
[http://www.financialsecrecyindex.com/PDF/USA.pdf](http://www.financialsecrecyindex.com/PDF/USA.pdf)

~~~
ckastner
Another joke is that the U.S. is the last remaining tax haven in the world,
because despite the U.S. requiring everybody else to share information with
them (eg FATCA), they refuse to share information with anyone else.

The U.S. is not a participating country of AEOI.

~~~
cylinder
Foreign banks should have called the US' bluff.

------
bogomipz
It seems like real estate is increasingly filling the role of banking secrecy
any way. Real estate LLCs offer the same secrecy as a former Swiss bank
account with the benefit with added benefit of having your investment grow
potentially 5% a year long term. I don't see governments in the US or UK doing
anything about this however.

This article provides a good look at this phenomenon in New York City but its
happening in many cities throughout the world:

[http://nymag.com/news/features/foreigners-hiding-money-
new-y...](http://nymag.com/news/features/foreigners-hiding-money-new-york-
real-estate-2014-6/)

I think real estate as the new bank account has far worse implications. Hiding
money in foreign real-estate deprives the local economy of tax coffers as
these folks won't actually live there and won't contribute to the tax base in
the form of federal, local and state taxes. As well it hurts the country where
those seeing to hide money are domiciled. As cities become even more crowded
and the housing stock tightens even further, developers "building safety
deposit boxes in the sky" to lure hot money seems like it might have bigger
societal implications than parking money in a passbook savings account in
Switzerland.

~~~
aianus
> Hiding money in foreign real-estate deprives the local economy of tax
> coffers as these folks won't actually live there and won't contribute to the
> tax base in the form of federal, local and state taxes.

They have to pay property taxes at least. And since they're not living there
they don't use any of the taxpayer funded services either. Sounds like a net
gain for the local resident taxpayer.

~~~
bogomipz
Someone who actually lives in a place pumps money into the local economy in
addition to paying property and local taxes.

Someone using a real estate as a bank account only pays real estate taxes.

Given the above and the fact that housing and land are extremely scarce
commodities in a city, how exactly is someone using housing solely as a bank
account a net gain for a resident tax payer?

This is of course just quantifying the financial aspect. What about the social
aspect? What happens to the fabric of a neighborhood when development caters
to people who don't actually live there?

How is that a net gain resident tax payer?

~~~
aianus
Land may be scarce but housing isn't. We can keep building half-empty 60-story
condos and taking rich foreigners' money until the cows come home.

~~~
bogomipz
And what about the rental market? That's also part of the housing stock no?

------
briandear
I feel that governments ought not have a right to my private financial
information without a warrant. If they think I have committed a crime, they
ought to be forced to prove such a crime. This is no different than every home
having 24/7 interior surveillance with the hope that a crime could be
discovered.

Governments, especially so-called "progressive" governments have the wrong
belief that our money belongs to the government first and citizens are
permitted to keep their 'share.' I know many people here think that a total
loss of financial privacy is 'fair,' because of some sort of misguided class-
warfare, however how would you feel if your entire computer and web history
were transmitted to the government with the purpose of identifying crimes you
might commit as opposed to being in response to a warrant that establishes
probable cause that you actually committed a crime. Having money in an
overseas account does not even come close to reaching a threshold of probable
cause for tax evasion. However having overseas money (or in my case, a
domestic French account,) doesn't mean you are a potential criminal any more
than being black means you are a potential criminal. This is financial "stop
and frisk."

In the US this loss of financial privacy and these 'disclosures' amount to a
warrantless search. I welcome any counter argument.

Just to be clear, I'm not a 'fat cat' billionaire -- just an American living
in France that has the 'privilege' of being taxed (heavily) by both the US and
France. My French bank has to disclose information about my accounts to the US
Treasury and I have to fill out an FBAR each year to 'prove' to the US that I
am tax compliant, thanks to FATCA.

If it weren't for the obvious class warfare aspect, liberty minded
progressives would be losing their minds over this violation of the fourth
amendment. They'll howl over warrantless wire-taps but many remain silent with
the financial equivalent of wire-taps.

I am not advocating tax evasion, nor do I support or defend those actually
evading lawful taxation; I am opposed to a police state where everyone is a
criminal until proven otherwise.

~~~
nrjdhsbsid
The US govt doesn't take kindly to anyone hiding money to avoid taxes, whether
that's setting up a chain of shell companies in the Caribbean or hiding money
in the matress.

I disagree with your premise only because any kind of financial secrecy leads
to tax evasion, and taxes are how the government exists. It sucks making money
over seas and that's because all the fat cats try to stuff their money over
there. Nothing against you but a fair law treats everyone the same.

Your argument rings of the "sovereign citizen" movement in the US which is
basically a bunch of idiots that chant hail the USA while they simultaneously
dodge the IRS.

~~~
m_mueller
Here's my point of view as a Swiss citizen: Many of us tend to see banking
secrecy as just another check and balance. The Swiss government is supposed to
be the _employee_ of its people, not the other way round. Banking secrecy
gives a tool into people's hands against overly aggressive taxation. For Swiss
this has worked well, in general the tax revenue is just fine and taxes are
kept reasonable. I'm fine if it gets cut for foreigners though - Switzerland
isn't responsible for the checks and balances of foreign citizens towards
their nation.

~~~
brianwawok
But historically you have made a lot of money off these foreigners. Will that
matter to lose the business?

~~~
m_mueller
somewhat, but (a) I think this transition is mostly complete already and the
Swiss economy has survived it so far, (b) banking in Switzerland is about 8%
of GDP, not significantly more than in many other developed countries and (c)
a big chunk Swiss banking revenue is AFAIK still in the domestic market. Will
it show up somewhere in a spreadsheet? Certainly. Will it destroy Swiss
banking or Switzerland as we know it? Most probably not. [1]

That being said, if 2008 has taught us anything, it's not to underestimate
greedy bankers and their favourite puppy 'leverage'.

[1] Some small private banks specialised on this sort of business may go under
though.

------
return0
This is so long overdue, it's almost useless. Where were these laws in the
roaring 80s and 90s when rich people were actually making money (instead of
today's stagnation)? Everyone who has cash to move has probably moved their
money in obscure location outside the reach of the west (e.g. UAE). These new
secrecy deals are just there to solidify the sovereignity of old money in
europe.

~~~
sschueller
The only people really affected are the ones without any money.

The Americans living abroad not being able to get bank accounts because the
local banks are too afraid of US fines or the double taxation of income for
those living abroad.

------
urza
If you want to have financial privacy, start learning about cryptocurrencies.

Getting to know bitcoin is obvious, but there are also other kids on the
block. Monero is the most successful cryptocurrency that has privacy built in:
[https://getmonero.org/home](https://getmonero.org/home)

In the medium term no banks in any country will be able to provide you
financial privacy.

We're not there yet, bu it is coming.

And as a bonus with cc you get money that cannot be "frozen" because some
government says so or money that disappears because your bank/government
screws up.

In the future cryptocurrencies will be more real money then fiat currrencies.
For some countries this is true alredy today.

~~~
chakalakasp
"Here, put your money in this magic box. It may double in value in a week or
it may be worth pennies on the dollar tomorrow. Nobody will know what you do
with this money if you shake the box right. Put the box under your bed -- if
you lose it, all your money is gone."

Bitcoin and the Swiss banking industry are apples and oranges.

~~~
EthanHeilman
>Bitcoin and the Swiss banking industry are apples and oranges.

I'd say it is a babies to cemeteries comparison.

Banking privacy is dead or dying. Cryptocurrencies offer enormous potential
however with regard to privacy they are still in the experimental phase and
require time to mature and develop.

~~~
pjc50
Cryptocurrencies log all transactions in a world-readable log. Their only
privacy is pseudonymity, which is very easily breached. And it's quite a
hassle to acquire without going through an exchange which logs all your
personal information for AML anyway.

~~~
amjd
This used to be the case, but not anymore. As mentioned in one of the parent
comments, there are now cryptocurrencies that provide anonymity as well, check
Monero [1] and Zcash [2].

[1] [https://getmonero.org/home](https://getmonero.org/home)

[2] [https://z.cash/](https://z.cash/)

~~~
tw04
And you can bet if they gain any traction, they will be dealt with swiftly by
the US government under the guise of "war on drugs".

This has been repeated so many times now that it makes my head hurt to think
anyone _actually_ believes you're going to have anonymity in banking/money
exchanges.

~~~
EthanHeilman
Do you think we are in the final days of cash? Will we return to the pure debt
based economies of the ancient world and never change course?

The US government's relationship with the global banking network is the result
of very particular conditions following the end of the second world war and
the end of the cold war. As these conditions shift over the next 10-20 years
I'm not sure we can predict that these anti-privacy priorities will be
maintained.

------
caseysoftware
FTA:

> _However, poor countries will not be accorded this privilege because they
> lack the resources to fulfill the conditions for automatic information
> exchange_

So bankers will be offered as a sacrifice but the dictator pillaging his
country will be protected. How cute.

------
denzell
Only for certain countries:
[https://www.sif.admin.ch/sif/en/home/themen/internationale-s...](https://www.sif.admin.ch/sif/en/home/themen/internationale-
steuerpolitik/automatischer-informationsaustausch.html)

Tax evaders from USA are safe.

~~~
pas
I very much doubt that.

When you open a bank account there they'll go to very great lengths to make
sure you're not from the US and you don't fall under FATCA (forein account tax
complience act), and if you do, then .. well, you usually can't just open an
account there, but there are branch offices of course that are ready and
willing to do business with people and entities associated with the IRS,
probably they are a bit more costly though.

~~~
seanmcdirmid
This applies even to Swiss citizens with American green cards, unfortunately.

Note private banking has always had different rules from consumer banks.

------
mtgx
I can't find the article, but Switzerland started sharing banking information
with the U.S. a few years ago. This only makes it official.

------
vikiomega9
Why does confidentiality play a big factor here?

~~~
ZenoArrow
If you have undeclared earnings (undeclared to avoid paying taxes), you'll
want somewhere to hide that money.

------
blueprint
Time to use Monero.

------
known
Black money is converted to Black wealth long time back via Quid pro quo
[http://qz.com/843902/1-of-indians-now-hold-nearly-60-of-
the-...](http://qz.com/843902/1-of-indians-now-hold-nearly-60-of-the-countrys-
wealth/)

