Basking in the glory of OVDP and the FBAR Fundraiser for Individuals:
The Department of Justice Announces OVDP for Banks!
On August 30, 2013 the U.S. Department of Justice created a voluntary disclosure program for Swiss banks. It was clearly premised on the OVDP program for people. My post describing OVDP for banks ended with:
The possible next step …
The U.S. is clearly on a mission to confiscate assets throughout the world.
In the beginning, there was OVDP for individuals.
Now we have OVDP for banks.
Coming soon, OVDP for financial advisors.
Soon, we will all become Whistleblowers.
The solution to this is for the U.S. to simply absorb all the other sovereign nations of the world. Once we become one country, there will be no more “offshore accounts”. But, how would fines be imposed then?
The practical implications of OVDP for banks
Just me posts the following comment at The Isaac Brock Society:
For those like me who haven’t been following the intricate details of the Swiss situation as closely as others, and don’t quite understand what is going on with the Banks decisions about the Swiss OVDP, this explanation sent to me really helped… I am passing it on for those that might be interested.
They wrote:
The big controversy here is that in August the Swiss government announced that they had negotiated an agreement with the US DOJ that allowed Swiss banks to get the whole issue behind them, by handing over info on undeclared accounts and paying a fine of a percentage of the total of those accounts.
The fine is fixed at 20% of the total of undeclared accounts opened before August 2008, 30% of the total of those opened between August 2008 and February 2009, and 50% of accounts opened after that. The fine would be reduced by the amount of the fine already paid by the US person through the OVDP, if the bank could prove that the US person entered the OVDP at the instigation of the bank.
The banks were supposed to be able to identify themselves to the DOJ in one of four categories – number one is those 14 banks which have already been indicted and are working with the DOJ to hand over info, number two is those who have a considerable number of undeclared US clients but who have not yet been indicted, number three was supposed to be those with few US clients, and number 4 was local banks with virtually all Swiss clients.
The problem is that the program as defined in August was so vague and unclear that the Swiss banks wrote to the DOJ and asked for clarification (BAD idea), and in the comments the DOJ sent back in early November, they specified that even ONE undeclared US client meant that a bank had to declare itself as being in category two, not three or four.
When you know how many accidental Americans there are in Switzerland, it seems totally impossible that any bank in Switzerland can guarantee that it didn’t even have ONE account of someone who turns out to be a US person in addition to having a Swiss passport with which they opened the account.
Meaning, there is no possibility to be in 3 or 4. Every bank will have to identify themselves to the DOJ as category two, will have to go through every single account to identify people with a second or third passport which happens to be US, and will have to pay a percentage of the total of those accounts as a fine to the US.
The banks are now accusing the Swiss government of not knowing what they signed, and basically of betraying the banks. Which they did. The government is desperate to get the US off their back, and so are the banks, but this program is so over the top as to be unimplementable (sounds like FATCA in the first place), so the banks are now debating how they can just wash their hands of the whole thing and declare that they won’t participate. Would the US go so far as to indict every single Swiss bank ? Cut off the USD accounts of every single Swiss bank ???
There are still thousands of Swiss bank employees who will not travel to the US for fear of being stopped at the border, at least for questioning if not for arrest, and most banks here actually formally forbid top level employees from travelling to the US, even for vacation, if they had the slightest contact with undeclared Americans, even if it was in a role of getting the American to declare their account.
The image of the United States has been SERIOUSLY damaged in Switzerland by this American overkill. I am in touch practically every day with at least one and sometimes several accidental Americans who are in a panic because they’ve never declared to the US and they are now hearing about horrendous fines and penalties being imposed on people such as themselves.
I still do not in any way understand how the IRS can possibly follow up on each and every account which is coming forward from accidental Americans, not just in Switzerland but worldwide, with the limited man- and woman-power, funds, and time that they have. I can only think that for cases under a certain amount, they will just drop it, otherwise the whole process could last the next twenty years or more.
And for what ? Peanuts !!!Anyhow, that’s the gist of the Swiss situation. Frustration, anxiety, fear, bitterness, recrimination. What other adjectives could I use ?????
To which a friend replied…
Has the Swiss government gone completely mad? What on earth are they thinking permitting the IRS to punish ALL Swiss banks for acting entirely correctly under SWISS law? I’ve always been under the – obvious illusory – impression that the purpose of governments were to protect their citizens and businesses against external threats, and to especially defend the issue of sovereignty within their own borders against all who would attempt to impose extra-territoriality against its citizens and businesses that are contrary to issues of sovereignty and common sense and common good. How can ANY Swiss official see FATCA in this light at all? Why would ANY country – let alone Switzerland – permit the IRS to impose its own interpretation of issues of legality on Swiss entities, especially when according to Swiss law they have done nothing wrong??
I simply am baffled! Is everyone in Bern smoking pot?
the response
UBS blew the entire Swiss banking system out of the water because they WERE breaking US law – they were actively marketing their services of tax evasion to US citizens inside the United States, they were seeing people inside the US, they were transporting cash across borders into the US, they were setting up structures to hide the identities of US citizens .
So when our friend Birkenfeld blew the whistle on UBS, the US obviously decided that every bank in Switzerland must be doing the same thing as UBS, which they weren’t.
Bern is desperate to stop the United States’ war of attrition on Swiss banks, but they’re bending over backwards to come to an agreement, and they keep on being surprised by the ongoing never-ending demands of the US.
I don’t entirely blame Bern, they’re trying to deal with a horrible situation, but the agreement is so bad that instead of being an “agreement” allowing banks to get out from under US pressure, it’s turning out to be a system to bring down just about every bank.
There will be a radio program to be aired tomorrow, with a Bank official I know, saying that from a strictly legal point of view, banks who have only a few undeclared US clients can refuse to participate in this “agreement”, and they can defend themselves very well in a US court since the US is accusing banks of CONSPIRACY located inside the United States, as UBS was doing, and most banks weren’t doing that at all.
This goes on and on and on and on …..
Frightening isn’t it!
But, of course innocent Americans abroad must pay the price to help the banks!
A recent blog post at Geneva Watch includes:
The onus falls on any US tax person who has had a Swiss bank account since 2008 to show that he or she has paid US taxes. The group, according to Lachowitz, may include people who renounced their citizenship during or after 2008.
The problem is how to show a bank, on short notice, that taxes were indeed filed – how to know which of the myriad IRS forms should be shown to the bank, although many banks are reportedly sending out form letters requiring copies of a dozen papers and tax forms, including attestations about the tax filer by an attorney or registered accountant. And how to know what information from elsewhere you can safely share with your bank.
One of the requested forms is often the FBAR, where Americans’ foreign bank accounts are listed; note that since July 2013 these must be filed with the US electronically.
Lachowitz’s advice, should you receive one of these letters from your bank? “US Taxpayers who have foreign financial accounts basically fall into two categories; those who are tax compliant in the US and those who will soon become tax compliant in the US. If you fall into the second category the advice has been, and remains, please go and see a tax attorney [immediately] who can help you decide how to become tax compliant. There are various ways, it will cost you some money, hopefully not too much, but you need LEGAL assistance, not just a CPA.”
This is what happens to all people and entities who enter into ANY OVDP agreement with the United States!
Yet, the countries of the world are considering entering into FATCA IGAs with the U.S. government.
I guess nobody ever told these government officials that:
A FATCA IGA is an OVDP program for countries!
Here is why!
As I wrote in an earlier post:
OVDP as an instrument of confiscation
One of the most effective instruments of the confiscation of assets has been the OVDP program for individuals.
Recognizing the success of the OVDP programs for INDIVIDUALS, the United States created an OVDP program for Swiss banks.
Now the U.S. Treasury announces FATCA – The OVDP program for countries!
What Treasury calls a FATCA IGA is really an OVDP program for countries!
FATCA is a tool to enforce citizenship-based taxation. By allowing U.S. citizens (Trojan Horse soldiers) to reside in a country, that country is agreeing to allow the United States to claim a share of that country’s GNP.
Example: Sell your house in Canada and send a share of the proceeds to the U.S.
To put it simply:
Citizenship-based taxation is a way for the U.S. to plunder the economies of other countries.
Let’s consider how the IGA works. Under a FATCA IGA a foreign (Offshore) country agrees to (Voluntarily) locate U.S. citizens in that country and inform the IRS (Disclosure) under a specific set of rules (Program). In other words:
A FATCA IGA is really an:
Offshore Voluntary Disclosure Program for countries.
Under an IGA, it is NOT the individual who makes the Offshore Voluntary Disclosure.
Under an IGA, it is NOT the banks who make the Offshore Voluntary Disclosure.
Under an IGA, it IS the country that makes the Offshore Voluntary Disclosure.
Countries “in effect” calculate their own penalty by allowing the U.S. to impose citizenship-based taxation in their countries.
Like the Offshore Voluntary Disclosures by the banks and the individuals, the Offshore Voluntary Disclosure by the country is at the expense of the country. By disclosing the accounts of the individual the country is in effect “calculating its own penalty”.
Does the rest of the world really believe that it should voluntarily, at its own expense, allow the wealth of the nation to be confiscated by the IRS?
This is a good question to ask Mr. Flaherty and Mr. Harper while they are considering whether to enter into a voluntary disclosure agreement – FATCA IGA – with the U.S. government.
Oh and have you heard?
But of course nobody understand how this could be happening …
Some even say (if you believe they are being honest that)
Actually U.S. citizens are renouncing to protect themselves from the U.S. government.
A message to ICIJ from the following commenter at the Isaac Brock Society.
Brockers need to jump on this one from ICIJ. The journalist needs some help understanding the injustice of “citizenship based taxation” for Americans living outside the homeland.
Expats get to enjoy double taxation and complicated filing with draconian penalties for mistakes. All for what return? No access to US public goods or services and no representation in Congress.
No shit Sherlock. Expats are tossing their US passports right where they belong– in the trash container. Exit taxes, so be it. Anything to get rid of the cancer of US servitude that eats away at the soul.
For all you homelander journalists, quit playing with your i tunes, wake up and smell the coffee. Ordinary middle class expats are fleeing from US tyranny! It doesn’t take a rocket scientist (or another congressional study) to figure it out.
This sentiment is reinforced by the results of the above poll!
Related articles
- #OVDP for financial advisors – coming soon to a bank near you! (renounceuscitizenship.wordpress.com)
- The #FATCA IGA aka #OVDP for countries (renounceuscitizenship.wordpress.com)
- #FATCA is sure to create and exacerbate tensions between Homelanders and #Americansabroad (renounceuscitizenship.wordpress.com)
- Swiss Banks Warned To Cooperate With Regulatory Body (eurasiareview.com)
- Swiss banks prepare to bow to U.S. demands, grudgingly (theglobeandmail.com)
- Banking Ex-UBS man arrested in Italy faces trial in US (hispanicbusiness.com)
U.S. Persons Abroad - Members of a Unique Tax, Form and Penalty Club 
This post also appeared at the Isaac Brock Society. The following comment by Just Me should be added here:
As usual, you put the narrative together VERY well, and are so correct! and they all clamor to comply…
See this comment…
Innocente says
December 7, 2013 at 6:44 am
The print-edition of the Handelszeitung (HZ) has an interview with the Paolo Cornaro (PC), CEO of Corner Bank, a credit-card bank in Switzerland. He seems to indicate that the tax deal between the Swiss and the US governments is more about extortion than about an agreement (translated):
“HZ: The US tax dispute is further along. How do you judge the agreement?
PC: This program, which I cannot characterize as an agreement with good conscience, strikes all banks as a block. It does not make a distinction between banks which consciously went on American soil to acquire customers and those banks, to name an extreme example, that opened accounts for two Swiss who were also coincidentally in possession of US citizenship. We know today which banks are Category 1. Since we never actively pursued American customers, we should be in Category 3. With this view, however, we are exposed to the risk in the event that documentation is not water-tight that we would have to accept additional liability.
HZ: You must decide no later than December 9?
PC: It certainly could happen that there are banks which will not be so far. We will classify ourselves in Category 2 in order to avoid further discussions and risk a penalty. We have American customers who are properly declared. The program’s concept is however that all are tax evaders. Then we must prove that this is not the case.
HZ: What kind of penalty are you looking at?
PC: I cannot and do not want to mention a number. We want to close a chapter by paying a penalty and then can we look forward again.
HZ: You will pay in order to have peace and quiet?
PC: Yes. We found ourselves in a similar situation in connection with the “unidentified accounts” matter. Our bank was founded in 1952 so there was certainly no unidentified accounts coming out of the war. We decided to pay anyway. Towards the end of the matter the actions were directed at all Swiss banks. If we wanted to continue with a US dollar clearing account, we had to pay. It didn’t matter whether we were guilty or not. We booked the payment as a solidarity contribution. Also at that time we wanted to simply conclude the matter.”
Do they really think this just conclude the matter so simply? Extortion at a grand scale.
as James Jatras so eloquently said…
Who is advising these people? How naive can they be? They really think an admission of guilt is the end of their ordeal, not just the beginning? Once the Mark of Cain is stamped onto their forehead it never comes off.