I’ve noticed Switzerland has been making financial headlines lately regarding more stringent reporting requirements for non-Swiss citizens and their assets stored in the country. Well-known financial analyst Martin Armstrong criticized Swiss policymakers Sunday about the development. He wrote in his blog:
Switzerland has completely capitulated its historic safe-haven status to the entire world. Switzerland was born from a tax revolt against the Hapsburg dynasty in Austria. The tax collector made William Tell shoot an apple off his son’s head with an arrow. Switzerland then remained neutral in war and religion, serving as a safe-haven for those who would be religiously persecuted. All of that is now gone forever. Switzerland has surrendered its integrity and its heritage… The Swiss Senate has passed the resolution to exchange ALL information on anyone who has any assets in Switzerland…
Armstrong added the following Wednesday:
As of January 1, 2016, Switzerland is handing over the names of everyone who has anything stored in its Swiss freeport customs warehouses. For decades, people have stored precious metals and art in Swiss custom ports — tax-free — as long as they did not take it into Switzerland.
Now any hope on trusting Switzerland is totally gone. That’s right — the Swiss handed over everyone with accounts in its banks. Now, they must report the name, address, and item descriptions of anyone storing art in its tax-free custom ports. This also applies to gold, silver, and other precious metals along with anything else of value…
One might think private offshore asset protection may no longer be possible in Switzerland, after reading Armstrong’s words.
However, consider the following.
First, Armstrong declared in that December 6 post:
The Swiss Senate has passed the resolution to exchange ALL information on anyone who has any assets in Switzerland…
Actually, from what I understand, this exchange pertains only to non-Swiss citizens utilizing services provided by Swiss financial institutions- such as banks. Private, non-bank vaults do not fall under this category.
The Swiss Broadcasting Corporation’s swissinfo.ch website reported on December 2:
The Swiss Senate has sealed the end of banking secrecy for foreign clients, following the House of Representatives in accepting the legal groundwork for the automatic exchange of information…
Currently, Switzerland sends data about tax evaders to foreign governments and institutions upon request only. However, the latest decision by the Senate makes it possible for such information to flow automatically to certain countries, among them Australia and the 28 European Union nations, with whom Switzerland has already concluded automatic exchange agreements. Switzerland has already signed a similar information exchange deal with the United States – the Foreign Account Tax Compliance Act (FATCA)…
(Editor’s note: Bold added for emphasis)
Armstrong wrote himself Wednesday:
That’s right — the Swiss handed over everyone with accounts in its banks…
(Editor’s note: Bold added for emphasis)
Second, it sounds like privacy still matters greatly to the Swiss. On his company’s website Tuesday, offshore expert Mark Nestmann discussed the 5-year prison term given to Hervé Falciani, a former employee of HSBC. In case readers are not familiar with Falcani, John Letzing wrote on The Wall Street Journal website back on November 27:
Hervé Falciani, a former employee at the Swiss branch of HSBC Holdings PLC who widely dispersed once-secret data about the bank’s clients, was handed a five-year prison sentence in a federal criminal court in Switzerland Friday.
Mr. Falciani, who worked for HSBC in Geneva, was convicted of aggravated industrial espionage. The court found that he had sought to offer stolen data about HSBC’s clients to a handful of banks in Lebanon.
In addition, the court found that Mr. Falciani tried to provide the data to France’s National Division of Financial Investigations, Germany’s Federal Intelligence Service, and Her Majesty’s Revenue and Customs in the U.K….
Nestmann remarked about the Falcani incident:
Is Swiss secrecy really dead? Only if you’re determined to cheat the taxman or are trying to use funds of criminal origin to fund your account. Otherwise, the Swiss government has demonstrated once again its determination to protect the data of legitimate bank customers from thieves, kidnappers, or extortionate governments…
(Editor’s note: Bold added for emphasis)
He also offered up these reassuring words later on in the piece:
All in all, if you’re looking for a secure place to stash some of your wealth outside the US, and you want it in a country that takes financial secrecy seriously, Switzerland is definitely worth considering…
(Editor’s note: Bold added for emphasis)
By Christopher E. Hill
Offshore Safe Deposit Boxes (www.offshoresafedepositboxes.com)
Sources:
Armstrong, Martin. “Switzerland Abandons Its Historic Principles.” Armstrong Economics Blog. 6 Dec. 2015. (http://www.armstrongeconomics.com/archives/39983). 11 Dec. 2015.
Armstrong, Martin. “Swiss to Give Up EVERYTHING & EVERYBODY.” Armstrong Economics Blog. 9 Dec. 2015. (http://www.armstrongeconomics.com/archives/40251). 11 Dec. 2015.
“Senate vote lays groundwork to end banking secrecy.” swissinfo.ch. 2 Dec. 2015. (http://www.swissinfo.ch/eng/data-exchange_senate-vote-lays-groundwork-to-end-banking-secrecy/41813770). 11 Dec. 2015.
Letzing, John. “Former HSBC Switzerland Employee Hervé Falciani Handed Five-Year Jail Term.” The Wall Street Journal. 27 Nov. 2015. (http://www.wsj.com/articles/former-hsbc-switzerland-employee-herve-faciani-handed-five-year-jail-term-1448642802). 11 Dec. 2015.
Nestmann, Mark. “The Swiss win a big victory for bank privacy.” The Nestmann Group. 8 Dec. 2015. (http://www.nestmann.com/the-swiss-win-a-big-victory-for-bank-privacy#.VmtFV0orLIU). 11 Dec. 2015.