US tax deal could prove deadly for small banks … US demands are "barely tolerable both economically and legally", according to Swiss Bankers Association chairman Patrick Odier … Valiant, Berner Kantonalbank and Vontobel are the first Swiss banks to have agreed to sign up to a United States tax declaration programme. Experts warn the associated legal costs of complying with the treaty could "kill" some of the smaller banks. Big banks, which sparked the US crackdown by knowingly or recklessly harbouring untaxed assets, have the financial clout to absorb costs and fines. But regional institutions, making up one in four of all Swiss banks, may face a harsher ultimate penalty, despite shouldering a far lesser burden of guilt than larger rivals. – SwissInfo.ch
Dominant Social Theme: The US government is only being reasonable. It will prosecute Swiss banks to the full extent of the law in order to make sure that tax revenues and resultant benefits to US citizens are maintained.
Free-Market Analysis: One thing is for certain: This amped-up regulatory regime is not about taxes. It's about control … not just of Swiss banking facilities but ultimately of banks around the world, large and small. In fact, the top elites already run central banks around the world, so this merely adds another layer of control. And when it comes to running banks, the place where banks supposedly had the most freedom was Switzerland, so that region was attacked first – just to provide an object lesson.
The elites do not care how many banks they "kill" – especially smaller banks that can often prove troublesome. The modern State is more comfortable with a few large and concentrated facilities than myriad small ones.
Here's more from the article.
In August, Switzerland agreed to US demands that force banks to come clean about their US clients. Under the terms of the deal, any bank found to have a single tax evader on their books is automatically catapulted into the same liability category as larger rivals. The Swiss financial regulator has requested banks to come forward by December 9 if they intend to sign on to the US tax deal.
By the end of the year they need to have informed the US authorities. While eventual fines may be lower than more culpable peers, the administrative and legal costs of dealing with the US authorities could run into millions of francs. "Some banks will have to take part in the programme based on a single US client relationship that they were not even aware of when the account was opened, perhaps because they had dual citizenship that the bank did not know about," Christian Fischer, managing partner at the CFM Partners law firm, told swissinfo.ch.
This is a costly exercise which could kill some small banks which feel they have not done anything wrong. Many banks are struggling, even loss-making at the moment, and this is a huge additional cost that they will not be able to bear." Under the terms of the Swiss-US tax deal, signed in August, the 300-plus banks in Switzerland will be arranged into four categories by the DoJ.
Group 1: The 14 banks already under active investigation for suspected tax evasion offences. These include UBS, Credit Suisse, Julius Bär, Pictet and the Zurich and Basel cantonal banks. Some Swiss subsidiaries of foreign banks are also included in this list, such HSBC and Israeli bank Leumi. Switzerland's oldest private bank, Rahn & Bodmer was the last institution to be added to the category 1 list in September.
Group 2: Those banks that know or suspect that they have committed tax evasion offences in the US. By coming clean before the end of the year, these banks would avoid criminal prosecution but would be subject to big fines (see other box).
Group 3: Banks that have US customers but believe that they, and their clients, have complied fully with US tax regulations.
Group 4: Banks with very limited exposure to foreign clients – no more than 2% of total client base are non-local.
The stark reality is that all banks, no matter their size, have an unpalatable choice to make before the end-of-year deadline to participate in the treaty expires: incur crippling legal bills to sign or risk annihilation at the hands of the US criminal courts.
The penalty for getting such decisions wrong is plain for all to see: banks Wegelin and Frey have already gone out of business after incurring the wrath of the US Department of Justice. The DoJ has made it clear that it would continue to throw any bank that attempts to wriggle out of its obligations to the criminal courts.
But the alternative to criminal proceedings will also cost banks dear. Signing up to the non-prosecution treaty could rack up legal fees to the tune of millions of francs and attract US civil penalties of up to 50% of untaxed assets held by banks.
"The programme is barely tolerable both economically and legally," Swiss Bankers Association (SBA) chairman Patrick Odier recently told reporters. Small banks have been horrified to learn that dual Swiss-US citizens are also being targeted by the US treaty.
Please keep in mind that Western economies do not need to tax in the central banking era.
Many of the major Western economies can print as much money as they want – and through various measures can damp inflation in the short-term anyway as they do so.
The idea that taxes provide government revenue is also a bit silly. The money that is taxed in the modern era is simply money that is RETURNING to the federal government in many major democracies or regions like the EU. The money is disseminated via government dependent central banks and then some of that money is re-circulated.
It is the recirculation that one can surely question. The argument is made that revenues are necessary so government can build schools, roads, etc. But why is there an assumption that the private sector cannot do just as good a job?
Are communities dependent on government for education and transportation? Maybe today, but not in other epochs. The US itself, prior to the Civil War, contained a private sector that provided much of today's governmental services and did it well and efficiently.
Leviathan actually collects taxes in the modern era as a way of organizing society around payment schemes. Taxes offer a good justification to demand that every citizen provide intimate details about his or her finances to the government. And having provided this information to the government, the individual is then in a delicate and culpable position were any of that information to prove to be incorrect.
This is an Anglosphere tax regime. Taxes, in fact, are merely a metaphor. This is just a way of extending the shadow government around the world without having to discuss it.
Using banks is clever because banks are already part of the worldwide elite structure and thus are in no position to resist. It is via banks that globalist precedent will continue to be set.
Using Switzerland is clever, as well, because Switzerland is a global banking center, and headquarters to the most powerful bank of all, the Bank for International Settlements. The Swiss generally are creatures of banking. There is no question but that the Swiss – at the top – will capitulate regularly as necessary. And thus, the precedents continue.
The extension of Anglosphere taxation has been well thought out. It uses makes use of banks and has focused in large part on Switzerland, the banking capital of the world.
Let us observe carefully how effectively this regime is expanded and enforced.