“It is obvious that only powerful States can presume – by measures which they judge to be good – to reclaim tax receipts which have escaped them, while at the same time profiting from the tax evasion which they offer to foreigners in their own territories.”
This is a quote from the book “Le secret bancaire est mort, vive l’évasion fiscale” [Bank secrecy is dead, long live tax evasion], which was published six years ago. It is presumptuous to quote oneself. Nevertheless, it should be noted that this book offered a very realistic analysis by predicting that the US would reclaim the international clientele of Swiss banks.
In recent years, the following questions were incessantly under discussion in Switzerland: Are the American attacks against banking secrecy part of an economic war, or do they constitute a legitimate battle with the aim to eradicate all tax evasion, especially at American banks? Our opponents were sincerely convinced that Washington would without fail adopt the global standards of fiscal information exchange. They took into serious consideration that a market of more than 15,000 billions of dollars of tax-free assets – mainly due to Anglo-Saxon financial structures – could be legalized suddenly as if with a conjuror’s wand. Today they must shed their illusions.
“The new Switzerland”, that is what the agency Bloomberg calls the US, and they also call them the “biggest tax haven in the world”. Although the Swiss banks have paid five billions of fines because they had helped American clients to escape the tax authorities, their biggest loss is that of the migration of the international clientele to a more secure and more stable tax haven – namely the United States of America.
Bloomberg speaks of a mass exodus of private assets, away from the jurisdiction of Switzerland, the Bahamas, the Cayman Islands, the Virgin Islands, and Bermuda, to the United States, which offer a completely straightforward real secrecy. Which state could call Washington to order? Also in Switzerland companies recommend their international and their Swiss clients to transfer their assets overseas, be it to Nevada, Wyoming or South Dakota.
This is a quite pragmatic approach: the US has been able to evade the new transparency standards to the enactment of which they themselves have contributed. So for example FATCA, an American law, or the OECD international standards of the automatic exchange of information, which have not been signed by Washington. Despite the refusal to sign these conventions, the US are by no means on the blacklist of the OECD. So – why should they miss the corresponding benefits? The only legal restriction is that American companies are not allowed to provide active assistance in tax evasion.
Nowadays it is very simple to hide your identity behind opaque American structures: If a wealthy Mexican opens an account at an American bank on behalf of a company resident in the Virgin Islands, only the company name is transmitted to the Virgin Islands without the name of the actual holder of the right of disposal ever being passed on to Mexico.
If a resident of Hong Kong hopes to escape the radar of the Chinese authorities it is sufficient that he contributes his wealth to a Limited Liability Company (LLC) in Nevada, which is owned by a trust in the same state. This guarantees him that no tax document which could be exchanged with Hong Kong is issued in the US. Who has anything better to offer? Fact is that foreign private assets that were invested in Swiss banks from 2007 to 2015 in the form of securities have, in accordance with the Swiss National Bank (SNB), melted down to half their sum, namely from 1,109 to 516 billion Swiss francs.
Are there any doubts about the survival of the fittest (in tax matters)? •
* Myret Zaki, born in 1973 in Cairo, has been living in Geneva since 1981. As of 1997 she gained her first experiences as finance analyst at the Genevan privat bank Lombard Odier Darier Hentsch & Cie. As of 2001 she has been in charge of the financial pages of the daily newspaper “Le Temps”. In December 2008 she published her first book “UBS, les dessous d’un scandale” [UBS, backgrounds of a scandal], in which she describes how the Swiss bank UBS gets pressurised by American authorities due to tax evasion affairs in the US and also especially due to the subprime crisis. In January 2010 Myret Zaki has become vice chief editor of the economical magazine Bilan in western Switzerland. In the same year she published the book “Le secret bancaire est mort, vive l’évasion fiscale” [The bank secrecy is dead, long live the tax evasion], in which she describes the economic war which led to the surrender of the Swiss bank secrecy. 2011 she published “La fin du Dollar” [The end of the Dollar], in which she predicts the end of the US-currency due to its permanent devaluation and the fiscal sliding of the Federal Reserve (FED). 2014 Myret Zaki becomes the chief editor of Bilan. She represents a view that protectionism in times of economic war thoroughly has its justification and calls free trade an illusion.
Source: Bilan from 24.02.2016; www.bilan.ch/myret-zaki/redaction-bilan/ira-paradis-fiscal
(Translation Current Concerns)
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