The innocent Swiss are crying, once again, that their national interests are being compromised by a bank which has been caught facilitating criminal activity and that the nation which has been defrauded of hundreds of millions of dollars of tax revenue – possibly more – is jeopardizing the bank’s very existence. Boo! Hoo!
AFP is reporting …
“Swiss warn UBS bank could collapse”
“Switzerland's justice minister warned in an interview on Sunday that top bank UBS could collapse if sensitive talks with the United States over a high-profile tax fraud investigation fall through.”
Let’s review …
An employee of the Swiss bank was charged with soliciting and facilitating deposits from clients which he may have believed were attempting to evade United States’ taxes. When caught, this employee apparently turned whistleblower (and became eligible for large financial rewards) and exposed a banking system that flaunted the commercial banking system’s disclosure requirements and may have offered refuge to funds belonging to scoundrels, cheats and probably worse – terrorists, people engaged in organized crime or defrauding the United States government. Perhaps even offering the mantle of secrecy to past and current members of the government who are also hiding ill-gotten gains.
"The actions of UBS in the United States are very problematic. Not just because they are punishable but also because they threaten all of the bank's activities," Eveline Widmer-Schlumpf told Le Matin Dimanche newspaper.
"’The Swiss economy and the job market would suffer on a major scale if UBS fails as a result of its licence being revoked in the United States,’ she said.”
UBS should get a pass because their criminal activity threatens to jeopardize their banking licenses in the United States? Of course this is absolutely ludicrous. UBS, if they are on a sound financial footing, would simply be acquired by another Swiss banking entity and life would continue on as before. The cost of signage and new forms is negligible.
“Switzerland and the United States have negotiated an agreement under which UBS would hand over information on some 4,500 account holders to US tax police.”
“But a Swiss court ruling earlier this month put the deal in doubt. Many in Switzerland, where banking secrecy is a source of pride and a key part of the economy, have accused the government of failing to protect UBS.”
"’We have nothing to blame ourselves for. I don't think anyone could prove that we acted badly,’ Widmer-Schlumpf said in the interview.”
Pecunia non olet (Money does not smell) …
While it is true that the Swiss do not regard crimes committed outside of their jurisdiction actionable unless it involves the State or a Swiss citizen, to turn a blind eye to the source of funds may be permissible … but to knowingly aid and abet criminal activity in a foreign country is unconscionable.
The bankers to the Nazis, dictators and criminals worldwide think that they have not acted badly? They allowed their employees and their institutions to become the vehicle to facilitate crimes within the United States and they profess innocence? Unbelievable!
Bottom line …
Tax evasion, even of confiscatory taxes, is still a crime in the United States. Let the Swiss banking system realize that they are no longer a haven for hiding funds derived from criminal activities if they breach another country’s sovereignty and commit crimes on its shore.
There are numerous legal ways of keeping funds offshore and bank secrecy is not always necessary. Perhaps the real fight is to keep the customer list secret – lest politicians, entertainers, businessmen and others lose their reputations along with their hidden funds.
There is a solution. Have the Swiss government enact a withholding policy based on 30% of the earned income, report the taxes to the U.S. government and remit the money to our Treasury department. If an American individual or corporation wanted to claim these funds as credits on their domestic tax bill, let them disclose their holdings and the matter would be resolved to everyone’s satisfaction.
If Americans are unhappy with their tax status, they can either engage better tax counsel or move their legal domicile offshore. Perhaps to join the thousands of American individuals and corporations that are currently evading U.S. taxes in island countries such as Bermuda.
We know the multi-nationals continue to evade their fair share of income and employee taxes in this matter – so it is possible to continue this pattern of evasion without crashing the Swiss economy.
-- steve
“The taxpayer - that's someone who works for the federal government but doesn't have to take the civil service examination.” ~Ronald Reagan
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