US ambassador asks Swiss banks to service Americans
Several Swiss banks have received a letter from the United States Ambassador to Bern, Suzan LeVine, asking them not to shun US citizens who want to open accounts in Switzerland.
Many Swiss banks have frozen out US clients, and even closed down existing accounts, in the wake of a damaging legal battle with the US Department of Justice (DoJ) over tax evasion. Banks have not only dropped links to tax cheats, but many have also shunned all US citizens, as the paperwork builds up along with the potential penalties for letting a rotten apple slip through the net.
LeVine plans to meet bankers to find a solution for tax compliant US citizens living in Switzerland. There are currently around 20,000 US citizens resident in the alpine country and many more with dual citizenship.
“Many US persons have expressed their concerns to me about their lack of access to banking services in Switzerland,” LeVine wrote in the letter that was seen by the Handelszeitung newspaper.
In a written statement to swissinfo.ch, LeVine said that some banks are starting to welcome honest US citizens back.
“We have been pleased with the response of banks such as UBS, Credit Suisse and Cornèr Bank who, when we asked if they’d start serving US citizens as customers again, put procedures in place with which to do so. We are also pleased that some banks such as Vontobel Bank have always supported US citizens,” she said.
“Thus, we wanted to reach out to more banks to see if they, too, would be willing to grow their business in this way. With that in mind, I sent a letter to executives at many other Swiss banks, describing the challenges that American citizens encounter when they want to open a bank account or just keep the one they have.”
Erasing history
LeVine added that “many” executives have agreed to meet her to work on solutions for US citizens who have difficulty accessing the Swiss financial system.
The Handelszeitung report suggests that this might not be an easy task. “The ambassador has completely blanked out the recent history of the tax dispute,” one anonymous banker is quoted by the newspaper.
Several banks are still smarting from billions of dollar in fines handed out by the DoJ for aiding and abetting US tax cheats. Others are still awaiting their punishment. All banks are fearful of falling foul of US Foreign Account Tax Compliance Act (FATCA) regulations – designed to weed out future tax cheats – which could potentially land them in more hot water.
The Swiss Bankers Association (SBA) said it had not been approached by LeVine. SBA spokeswoman Sindy Schmiegel said it was up to individual banks to choose whether to accept clients.
“They may choose the groups of clients they intend to serve or not,” she told swissinfo.ch in a written statement. “US citizens still find banks to serve them, however, some of our member banks are reluctant to do business with US clients due to the complexity of US regulation.”
Global problem
The Maryland-based American Citizens Abroad (ACA) organisation has for a long time been concerned that honest US citizens are being caught in the crossfire of tax evasion scandals and subsequent legislation to crack down on the problem.
US citizens living abroad are being denied banking services in a number of countries, not just Switzerland, according to ACA Executive Director Marylouise Serrato. Furthermore, US banks are also kicking out US clients who reside in other countries for fear of running afoul of regulations – both in the US and other countries.
ACA is lobbying the US Treasury to ease the scope of FATCA. It believes that tax compliant Americans abroad, or the foreign banks that serve them in their country of residence, should not be obliged to report accounts under FATCA.
“The focus of FATCA was to identify the offshore accounts of US citizens who live in the US,” Serrato told swissinfo.ch. “We do not believe the legislation was intended to catch up with Americans legitimately living abroad and who need local accounts.”
