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Asset Protection Using Offshore Banks in Multiple JurisdictionsComparison of Offshore Banking JurisdictionsOffshore Banking Money TrailAsset Protection Using Offshore Banks in Multiple JurisdictionsAsset Protection Using Offshore Banks in Multiple JurisdictionsAsset Protection Using Offshore Banks in Multiple JurisdictionsWhat is a Qualified Intermediary?FDIC Admits Emergency Bailout May Be NecessarySecond Passport and Second Citizenship ProgramsForex Trading Business Bank Account: Panama and Ecuador Weakest and Strongest USA Banks & Thrifts 08/11/08FDIC Facts and Figures – Not Encouraging 08/14/08Ecuador Trust Account BankingOffshore Banking Money TrailAnonymous No-Name Debit ATM CardAsset Protection Using Offshore Banks in Multiple JurisdictionsComparison of Offshore Banking JurisdictionsPanama New Immigration Law: Effective 8/26/08One Compelling Argument to Move Assets Offshore – LawsuitsUBS Swiss Bank Closing Accounts of AmericansWhat is a Qualified Intermediary?Second Passport and Second Citizenship ProgramsPanama New Immigration Law: Effective 8/26/08Panama New Immigration Law: Effective 8/26/08Second Passport and Second Citizenship ProgramsWhy Choose Guatemala?Ecuador BankingEcuador Bank AccountEcuador Trust Account BankingForex Trading Business Bank Account: Panama and Ecuador Ecuador Country ProfileOffshore Banking Money TrailFDIC Admits Emergency Bailout May Be NecessaryWhat Will You Do if the FDIC Fails?FDIC Facts and Figures – Not Encouraging 08/14/08Need an Economic Reason to Leave the USAUS Banks Fail, Depositors Take LossesUBS Swiss Bank Closing Accounts of Americans
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Introduction – UBS, the large Swiss bank, has come under attack from the USA regarding their operating inside the USA. They ran seminars inside of the USA promoting their offshore Swiss Banking and Lichtenstein Trusts. Of course the first mistake was operating physically inside of the USA. Their second mistake was offering tax reduction strategies inside of the USA. From there the errors just added up giving the USA Authority, Venue and Jurisdiction over UBS.
The USA eventually arrested a UBS banker in the USA. This banker in return for a diminished sentence provided testimony about UBS actions violating USA law. The Justice department then got an order from a USA court to get the UBS Swiss banking records on some 20,000 Americans. The USA does not have the names but estimates the amount of Americans opening accounts at UBS from 2002 to 2007 to be 20,000.
Analysis – It would appear that UBS will give the impression of cooperation. They will likely turn over the records of any USA person the USA has the names of in connection with any alleged tax fraud according to a treaty the USA has with Switzerland. The treaty calls for cooperation in cases where an income tax return was filed fraudulently with intent. This means if one understated their income the banking records would be producible under the terms of the treaty.
The USA wants to turn this into a fishing expedition asking for all USA person’s records for a five-year period of time. The Swiss will most likely not take this seriously since this is far beyond the scope of the treaty. The USA is implying that any USA citizen with a UBS bank account is a tax fraud without any evidence. If the USA has some shred of evidence on an individual UBS will probably turn over the records but selectively. The Swiss do not want to anger the Americans by harboring people filing false returns but they also do not want to ruin the Swiss banking Industry. One can only sell so much chocolate and watches.
The Swiss Fix – The way UBS see their way clear here is to close the accounts of any USA persons and not allow any such new accounts to be opened. They will allow USA persons to have accounts with UBS businesses operating in the USA under USA license. A UBS bank physically in the USA would be under USA laws and thus no bank secrecy or asset protection at all. It is likely that other banks in Switzerland and elsewhere will adopt such a policy to avoid encounters with the USA. This of course is the victory the USA was hoping for. They have been trying for years to combat the tax and privacy havens without much success. If they can get them to stop opening accounts for Americans and close the existing accounts that is a big victory. Of course most of the unfortunate Americans using UBS will simply more their funds to another jurisdiction.
Collateral Damage – UBS bank will be telling the USA citizens goodbye and usually this involves a nominal period of time to provide the bank with wiring instructions to send the funds from the closed accounts. The USA will be watching these outgoing wires with vigor and enthusiasm to see what they can learn about the UBS depositors. If these were personal accounts, doom and gloom on the account holder because they can see from the wiring information the names of the account holders and thus audit them or whatever. If the UBS account was a corporation or foundation the account owner could wire it to say an anonymous Panama corporation or foundation and thus their identities would be concealed and they could safely recover their funds.
Protection for the Client – We can speculate as to whether or not this sort of thing will happen in other banks in Switzerland and in other countries. The UBS bank really asked for this legally. Most don’t understand the law and are oblivious to the legality but UBS walked right into this one by handing the USA jurisdiction and authority by setting up tax reduction offices and seminars inside the USA and they got slammed. It is probably not going to go further to other countries but the scare value is great and the media is exploiting this.
The way to protect yourself from such an attack or fishing expedition in the future is to get a second passport and driver license from another country. Do this under a different name by having a name change in the judges chambers sealed by the judge so there is no trail to your new identity. Now you are you – same person, same picture, same signature, just a new name. This is not illegal. Many citizens of many countries hold dual citizenships.
Opening a bank account under your other identity documents is also not illegal. Dual nationals open bank accounts commonly with their second set of ID and have been doing so for years. Some people I met legally have seven passports and citizenships. So if the bank records, corporate records and stock broker records have you as a citizen of a small country that does not tax offshore income you will not be caught in any of these fishing nets.
Banking in a country that is not the pot of gold at the end of the rainbow for tax collectors like Switzerland is, can also be a good idea. We advocate Ecuador and Guatemala for this. They are relatively small countries with solid democracies and solid banking. These countries are most unlikely to cooperate with other countries except in cases of major criminality. Remember the Swiss signed a tax information sharing agreement with the USA some years ago and that is what the subpoena for the 20,000 banking records is based on. Panama has no tax treaties with any country.
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