The rumor mill in the main press is referring to how bank secrecy died.
Ascertaining the truth in this assertion is inevitable and fortunately the laws such as the FATCA, the Foreign Account Tax Compliance Act, insist each non-US financial institution to identify their US clients. In association to this, they also ask them to share the client’s transaction details with the IRS.
More specifically, a US Citizen can not have offshore bank secrecy anymore. However, it does not put a check on other grounds, and a recent Swiss case proves this point.
Last month, Herve Falciani, a Swiss private banking arm, HSBC’s former employee, was sentenced by a Swiss court to a prison term of five years. As per Swiss law, the criminal conviction was theft of data, industrial spying and violation of banking secrecy.
Herve Falciani worked from 2006-2008 in the information technology department in HSBC. He secretly downloaded the account details of over 100,000 clients. He is suspected to have sold the information to French tax authorities. However, he asserts that he wished to reveal tax fraud in the world’s largest banks. Later on, France and other countries took legal action using the information provided by Falciani for tax evasion against many prominent citizens.
It is doubtful that Falciani will spend a single day in prison. He is living in France and is a French-Spanish national, so both countries have denied Switzerland’s request of extradition.
This case now conveys the Swiss attitude regarding bank secrecy. In Spain and France, Falciani is respected as a national hero for revealing the HSBC wrongdoing. But, Switzerland was adamant and obtained a conviction of five-year for his data theft.
It is simple to understand now how the asset managers and Swiss banks hold global wealth around US $2 trillion. Conversely, regardless of the bad publicity, Switzerland holds more of global wealth than all other countries.
Finally, Switzerland is now encouraging to carry out such industrial espionage. Subsequently, Switzerland agreed to restrict bank secrecy in investigations that are tax-related. Henceforth, any Swiss bank employee trying such exploit will be considered as a criminal act on selling client data to kidnappers, identity thieves or governments such as Russia that initiated ‘de-offshorization’ operations to curtail flight.
Is Swiss secrecy dead? This is only if you cheat the taxman or use funds to fund your account for criminal origin. Else, the Swiss government stands ready, as usual, to protect the legitimate bank customer’s data from kidnappers, thieves or extortionate governments.
The U.S banks already use client’s data through affiliates and non-affiliated external companies to market clients depending on their account size. To place your wealth in a secure place out of the US, Switzerland is worth considering. In case you are a US citizen, there is a condition to deposit a minimum of $500,000 with a Swiss private bank. Nevertheless, opening bank accounts in other countries with lower investment and stringent secrecy laws is possible.
The dollar may be used to buy international bonds, stocks or to invest in non-US investment that is more beneficial. Believing you are a resident of the US, are you wishing your bank gives away your data to people interested in it or consider keeping everything in one basket?
This article is a summary from Nestmann.com